The technology in question decodes digital audio files
compressed in MP3 format and has been used in numerous
applications, including Napster, to play digital audio files on
personal computers. AOL subsidiary Nullsoft holds a software
licence from Playmedia for use in its Winamp MP3 player. However,
the court found that, by including the Playmedia code in a
different media player - namely AOL 6.0 - it may have exceeded the
rights in its licence.
Judge Howard Matz said: “Playmedia has established probable
success in proving that AOL exceeded the grant of the licence” and,
as well as ordering an injunction against further distribution of
the software, ordered AOL to notify all licensees of the
position.
AOL intends to appeal the decision but fears that it may face a
loss of $39 million in promotional materials for AOL 6.0 and costs
amounting to tens of millions more if previously distributed copies
are to be retrieved.
The ruling does not affect the new version of the software, AOL
7.0, which was released just two weeks ago.
