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Court Orders AOL to Stop Distributing 6.0 Software

PlayMedia Systems, Inc., which develops and markets the popular AMP MP3 audio decoding engine used in Winamp, has won a preliminary injunction against America Online, Inc., requiring AOL to stop distributing AOL 6.0 software containing PlayMedia's software and to notify all licensees of AOL 6.0 of the issuance of the injunction. An AOL spokesperson told internet.com the company would seek a stay of the order and pursue an immediate appeal.

In a decision passed down late Monday afternoon in Los Angeles, United States District Judge A. Howard Matz found that the L.A.-based PlayMedia had established the "probable validity" of allegations contained in a $47 million lawsuit filed against AOL by PlayMedia that its AMP MP3 playback technology was used in the AOL 6.0 Media Player without permission.

"This is just a preliminary ruling and we respectfully disagree," said AOL spokesperson Jim Whitney.

PlayMedia originally licensed AMP to Nullsoft, Inc., in 1999 for use in conjunction with Nullsoft's product, Winamp, one of the more popular MP3 players for personal computers. AMP was permitted to be sublicensed by Nullsoft for "use in conjunction with Winamp only."

The Dulles, Va.-based AOL, a wholly-owned subsidiary of AOL Time Warner , purchased Nullsoft and used AMP in the AOL 6.0 Media Player, a use for which it allegedly was not licensed. PlayMedia sued AOL for copyright infringement on April 17 and moved for a preliminary injunction.

PlayMedia attorney Henry Gradstein told internet.com that PlayMedia originally approached AOL shortly after it purchased Nullsoft and offered AOL a licensing deal for the use of AMP, pointing out to AOL that Nullsoft was only licensed to use the technology in Winamp. According to Gradstein, AOL declined the licensing agreement and proceeded to use the AMP technology in its Media Player software included in AOL 6.0.

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. According to court documents filed by AOL, the PlayMedia technology was not used in its newest 7.0 version.

"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 engine," said Brian D. Litman, PlayMedia's chairman and chief executive officer. "AOL and many foreign affiliates have distributed the AMP 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."

Gradstein estimated that there are at least 10 million users of AOL 6.0. Whitney said AOL does not break out its numbers by version.

"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," said Gradstein.

PlayMedia's AMP MP3 playback engine was created in 1997 and rapidly achieved fame for its efficiency and accuracy pursuant to the now-dominant MPEG MP3 audio standard. Since then, millions of people around the world have used the technology, through applications including Winamp and Napster, to enjoy digital audio on their personal computers. AMP is also used in other diverse applications such as CD-ROMs, online games, music education applications, digital music jukeboxes and music playback in retail establishments.