Spotify Gets Hit With A Patent Suit From Nonend, A Dutch Peer-To-Peer IP Holder

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The neverending patent wars keep on raging, and Spotify is the latest to get targeted in the social media skirmishes. The popular music streaming company is getting sued by Nonend Inventions, a Dutch company, which claims Spotify is infringing on five of its U.S. patents covering streaming media, peer-to-peer search, and retrieval and playback techniques. Nonend says altogether it holds more than 40 issued patents and patent applications in the areas of peer-to-peer networking and streaming technology. This is the first suit it has filed in defense of these.

The complaint, which we have embedded below, was filed in the U.S. District Court for the District of Delaware, against Spotify Limited and affiliated companies, today. Nonend is demanding a jury trial in the case.

Nonend says it is targeting Spotify and not Pandora or others because Spotify is built on a P2P architecture, meaning that users actually get very little of Spotify’s music from Spotify’s servers (8.8% Nonend claims); relying instead a distributed model using other subscribers on the network.

“This feature makes the Spotify service faster, more efficient, and less costly to operate, and uses the technology at the heart of the Nonend Patents,” the complaint says. Spotify, it notes, has three million U.S. subscribers who have shared over 27 million songs, and listened to over 13 billion songs. Spotify has been reportedly valued at $4 billion.

We have asked Nonend’s legal counsel if it plans to file suit against other P2P streaming companies as well. Nonend’s counsel, Richard C. Vasquez of Vasquez Benisek & Lindgren LLP, notes that Nonend has not yet, but would be willing, to license the technology.

This is not the first time that Spotify has been sued over patents. Just two weeks after it launched in the U.S. in 2011 it was sued by PacketVideo, which alleges that Spotify’s cloud-based music distribution architecture infringed on one of its patents. Spotify said at the time it would strongly contest that allegation. Spotify itself currently appears to have five patent applications with the USPTO but holds no assigned patents.

The is the latest in a series of social media patent suits. Facebook and Yahoo famously sparred over patents covering different features in Facebook until they finally reached an amicable settlement. Facebook itself has purchased and licensed dozens of patents for these features. Facebook is currently suing Mitel Networks, and Mitel is suing Facebook, over different features on the social network, so some of these newly acquired patents are coming into play.

Nonend Inventions describes itself as a “P2P and streaming technology innovator” but it doesn’t appear to have productized any of those innovations itself. Vasquez notes that when the technology was first created and the patents filed in 2000 and 2001, the company did have the “goal of becoming a streaming Internet radio company.”

Nonend’s website is very brief on what its current activities are: “Due to business developments this website is limited,” reads the homepage. It appears that all the patents in question at the moment (the exact phrase in the complaint is “include, but are not limited to”) have been created or co-created by Marc van Oldenborgh, who describes himself as the owner/inventor at Nonend on his LinkedIn profile.

The specific patents cited in the suit are U.S. Patent No. 7,587,508 (“Multiple Source Receiver-Driven Streaming of Content Between Peers”), U.S. Patent No. 7,590,752 (“Playing Media Content on a Media Player while Streaming the Retrieved Parts of the Media Content to Other Devices”), U.S. Patent No. 7,779,138 (“Streaming Content Between Media Players Configured to Locate Each Other”), U.S. Patent No. 8,090,862 (“Initiating an Alternative Communication Channel for Receiving Streaming Content”), and U.S. Patent No. 8,099,513 (“Streaming Content from One or More Production Nodes or Media Player Systems”).

“The Nonend Patents have been recognized as state-of-the-art, cited as prior art in at least twelve (12) U.S. patents issued to the likes of IBM, Samsung, and Sony,” the complaint notes.

Financial damages are not specified in the complaint.

We are reaching out to Spotify for comment on this case and will update as we learn more.