Destiny suit on Billboard.biz
Destiny Media Files Suit Against Musicrypt
By Susan Butler, N.Y.
March 7, 2006 - Destiny Media Technologies filed a legal claim against Musicrypt today (March 7) to resolve a Canadian patent fight. It centers on technology that allows music to be transferred digitally over the Internet but played only on authorized computers.
Vancouver-based Destiny and marketing partner Promo Only deliver pre-release, promotional copies of music and videos to radio stations, disc jockeys and others over the Internet. Destiny's software, which includes the company's Media Protected by Encryption – or MPE – technology, essentially takes a digital fingerprint of any computer that attempts to play the music file. If the fingerprint is not authorized, the music will not play.
Since its launch in the United States in October 2004, the Promo Only MPE system has distributed more than 9,000 tracks in the for record labels including Universal Music Group, Sony BMG Music Entertainment, EMI Music Group and Warner Music Group, Destiny says in a statement.
Toronto-based Musicrypt also distributes music through its web-based Digital Media Delivery System (DMDS). The company applied for a Canadian patent in 2002, which was issued in January 2005, for its Content Distribution System and Method that is part of DMDS.
The Big Three of Canadian radio -- Corus Radio, Rogers Media Broadcasting and Standard Radio -- routinely use the Musicrypt service to receive music from Canada's Big Four label groups: Sony BMG, Universal Music Group, WMG and Capitol EMI.
Destiny claims that in the fall of 2005, Destiny and Promo Only learned that executives and employees of Musicrypt were making statements to customers of the Promo Only MPE system that implied that they were infringing on Musicrypt's rights by using the system in Canada.
In response, Destiny Media Technologies, a Colorado company based in Vancouver, and its subsidiary Destiny Software Productions filed the claim in the Federal Court in Toronto. They allege that its technology does not infringe the patent. They also challenge the validity of Musicrypt's patent, claiming that the invention is not new or unique.
"We don't proceed with litigation lightly," says Destiny CEO Steve Vestergaard, "but it is important that we protect our customers from unjustified interference from Musicrypt as we begin offering our system in Canada."
Musicrypt could not be reached for comment.