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Altnet seeks patent royalties from P2P

File-swapping companies find themselves on same side as the recording industry in patent dispute.

Just a few months after suing the Recording Industry Association of America, peer-to-peer company Altnet has begun seeking royalties from file-swapping companies over the same patent issues.

For almost two years, Brilliant Digital Entertainment subsidiary Altnet has said it has patent rights to a basic means of identifying files on peer-to-peer networks. Now it's finally sending letters to popular file-swapping companies such as Lime Wire, BearShare and StreamCast Networks, saying they need to pay for licenses or risk legal action.

"There was time needed to determine how other peer-to-peer applications were working," said Larry Hadley, a Los Angeles attorney representing Altnet on the issue. "No lawsuits have been filed at this time, but this is placing companies on notice that their software uses (Altnet's) patented technology. If they wish to continue using it, then they need to obtain a license."

Altnet's actions have oddly put file-swapping companies and record companies on the same side of a dispute. The company sued the RIAA and several peer-to-peer network-monitoring companies in September, charging that by spying on the file-swapping networks, they were also infringing on the patents.

That case is scheduled to go to trial in late October.

Although the issue is unlikely to stall any of the file-swapping companies' technology development for now, it does add a new legal wrinkle to an industry segment already mired in litigation.

The patents involved are based on ways of identifying a file using a technique called a "hash," a common feature of many computer applications that need to authenticate digital content. Altnet purchased the rights to the patents in peer-to-peer applications in 2003.

Peer-to-peer companies contacted have already rallied against the claims, saying they will try to provide "prior art" that shows the patents to be invalid.

"I don't think that the patents themselves will hold up," said Greg Bildson, chief technical officer of Lime Wire. "There's so much prior art and use of hashes in software that these patents probably should never have been granted."