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Judge to AOL: Stop Distributing Version 6.0

United States District Judge A. Howard Matz issued a preliminary injunction against American Online, Inc. finding that PlayMedia Systems’ had established the probable validity of allegations that its AMP(R) MP3 playback technology was used in the AOL 6.0 Media Player without permission. At issue is whether AOL violates the terms of a 1999 licensing agreement.

PlayMedia, a firm that designs and develops digital content distribution and management software, markets a popular MP3 audio decoding engine known as AMP. PlayMedia originally licensed AMP to Nullsoft in 1999 for use in conjunction with Nullsoft’s Winamp product. AOL subsequently bought Nullsoft and used the music player in its AOL 6.0 software, but PlayMedia claimed that AOL should have negotiated a separate licensing agreement. In April 2001 PlayMedia sued AOL for copyright and moved for this preliminary injunction.

In opposition, AOL denied that AOL 6.0 software infringed upon PlayMedia’s software, and further argued that the issuance of an injunction would cost AOL tens of millions of dollars. In a 38-page opinion paper, Judge Matz dismissed these arguments and found that PlayMedia had established the probable validity of its claim of copyright infringement, entering the following Preliminary Injunction Order:

PlayMedia’s chairman and chief executive officer Brian Litman said, “We regret that this matter had to be litigated. Nevertheless, we are heartened by Judge Matz’s decision and will continue to vigorously enforce our intellectual property rights to the AMP(R) engine.” Litman added “AOL and many foreign affiliates have distributed the AMP(R) software in AOL 6.0 worldwide using vehicles as diverse as leading retail stores to Cheerios boxes. We are currently evaluating the broader implications of the court’s decision.”

Regarding the injunction, PlayMedia’s trial attorney Henry Gradstein, partner in the Los Angeles-based law firm of Gradstein, Luskin & Van Dalsem, said, “The irony in this case is that historically, AOL claims to support ‘strong protection of intellectual property rights, both online and off, yet the court’s opinion suggests that AOL did not respect the intellectual property rights of our client, PlayMedia.”  

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