Judge Tells AOL to Drop Software

A federal judge in Los Angeles slapped a pretrial injunction on America Online Inc., ordering the company to remove music-playing technology from the software used by millions of AOL subscribers.

The ruling came in a copyright infringement lawsuit brought by PlayMedia Systems of Los Angeles against AOL, a division of media giant AOL Time Warner Inc. PlayMedia accuses AOL of using PlayMedia’s patented AMP technology in the media player AOL built into version 6.0 of its software.

U.S. District Judge A. Howard Matz ruled late Monday that if the case went to trial, PlayMedia was likely to prevail. Matz ordered AOL to remove the AMP technology from users’ computers the next time they logged on to the service, using AOL’s “live update” feature.

AOL spokesman Jim Whitney said the company disagrees with the ruling and plans to appeal as soon as possible.

A significant percentage of AOL’s 31 million subscribers worldwide use version 6.0, said Whitney, saying he couldn’t be more specific.

AOL recently began shipping version 7.0 of its software, which does not use the AMP technology. The injunction does not apply to that version.

Henry Gradstein, PlayMedia’s attorney, said the company initially had asked for $47 million in damages from AOL. But it may seek to expand the case to cover AOL affiliate CompuServe and the companies that distributed AOL software, including computer manufacturers.

The AMP software decodes music files in the MP3 format so they can be played on a computer.

AOL acknowledged that it used AMP as part of the media player in version 6.0, but argued that it had the right to do so because its subsidiary Nullsoft had licensed it from PlayMedia.

In fact, PlayMedia also had sued Nullsoft for copyright infringement in 1999, alleging that its popular Winamp MP3-playing software was based in part on AMP. Nullsoft eventually settled the case by paying PlayMedia $7.5 million for a license.

Days after the settlement, AOL paid $90 million worth of stock to buy Nullsoft.

AOL released version 6.0 in October 2000, including a media player based on Winamp, Matz wrote in his ruling. Nullsoft, meanwhile, has continued to release new versions of Winamp.

PlayMedia argued that its license with Nullsoft applied only to the Winamp player, not to AOL 6.0 or other products derived from the player.

Matz ruled that PlayMedia “has established probable success in proving that AOL exceeded ... the license,” and granted the injunction the company requested.

Gradstein said the case probably would not go to trial until next year.