SanDisk Sued in MP3 Patent Licensing Dispute

[Slimy]

SanDisk is currently caught up in a German lawsuit that could determine which patents (if any) are necessary for MP3 player manufacturers to license. Italian company Sisvel S.p.a. filed a lawsuit against SanDisk earlier this year and then requested an injunction against the company from the Berlin District Court. That injunction was granted on August 31, and the SanDisk booth at the IFA 2006 tradeshow was later raided by German authorities. All of the company's MP3 players were seized, as were advertising materials, on the grounds that SanDisk had not licensed necessary patents from Sisvel for its MP3 playback. Today, according to a Sisvel statement, a higher German court has ruled that the seizure was legitimate, though no ruling has yet come down in the actual patent infringement lawsuit. Although the dispute may sound arcane, it could help to determine whether companies that wish to include MP3 functionality in their devices are legally obligated to license certain Sisvel audio MPEG patents.

Sisvel, though not a well-known name to consumers, licenses numerous patents owned by European giant Philips and other electronics firms (its US subsidiary, Audio MPEG, does the same on this side of the pond). The company claims that its audio patents are a sine qua non for MP3 manufacturers, and it has convinced many of the largest companies in the field to sign on rather than risk litigation. Apple, Microsoft, Pioneer, and Motorola have all taken out Sisvel licenses, but SanDisk claims that its players in no way infringe on the Sisvel patents, and it has no intention of paying Sisvel anything. Sisvel is aggressive about pursuing its demands, though, as the German raid against SanDisk showed. In addition to the German lawsuit, Sisvel is pursuing SanDisk in the Netherlands, the UK, and in the US, where Audio MPEG (can you spot the glaring typo on their home page?) has filed suit against SanDisk in Virginia federal court. Audio MPEG has also previously sued Thomson (owner of other important MP3 patents from Fraunhofer), Creative Labs, and Samsung in the same venue, so the company is not afraid of litigation.

Ars Technica