Spotify gets sued for patent infringement


(CBS/CNET) - Popular music streaming service Spotify faces a patent-infringement lawsuit.

PacketVideo, a software company that enables wireless streaming of music and videos on mobile devices, filed the suit against Spotify on Wednesday, claiming that the U.K.-based company violated a patent for "distribution of music in digital form."

The plaintiff cited a violation of U.S. patent 5,636,276 and says "Spotify USA has offered for sale, sold, and imported products and/or services configured to infringe the '276 patent, and instructed and encouraged others to use the '276 patent in an infringing manner."

"PacketVideo has a strong intellectual property portfolio, and will take any necessary action needed to protect its intellectual property and prevent the misuse of its patents," says Joel Espelien, general counsel and vice president of strategic relationships.

According to CNET, "PacketVideo's victory could have a profound impact on the marketplace. It appears that the patent is quite broad, and there's no telling if the company will go after other music-streaming services that haven't fallen in line."

This isn't the end of the road for Spotify or companies that fall under the same category. CNET got a statement via e-mail from the music streaming company.

"In just under three years, Spotify has become more popular than any other music service of its kind," the company said in the e-mail. "This success is, in large part, due to our own highly innovative, proprietary hybrid technology that incorporates peer-to-peer technology. The result is what we humbly believe to be a better music experience-lightning fast, dead simple and really social.

"PacketVideo is claiming that by distributing music over the Internet, Spotify (and by inference, any other similar digital music service) has infringed one of the patents that has previously been acquired by PacketVideo," the company continued. "Spotify is strongly contesting PacketVideo's claim.

PacketVideo was founded in 1998 in San Diego, Calif. The company says its software is installed in over 260 million devices around the world. And has license agreements with companies like Verizon Wireless and Nokia.

Spotify launch with great success in the U.S. earlier this month. The company originally launched to European markets in 2008. There is much speculation about a Spotify and Facebook partnership. The social network has been trying to incorporate music for years. Forbes reported the rumor in May 2011, but neither companies has confirmed such a deal.

The music-streaming service has accompanying apps for iOS, Android and Windows. Users in the U.S. currently need an invitation to join.