Nonend Inventions Files Content-Sharing Patent Infringement Lawsuit Against Spotify

Nonend Inventions, N.V., a Dutch peer-to-peer and streaming technology innovator, and holder of more than 40 issued patents and applications in the field, announced through its counsel, Vasquez Benisek & Lindgren LLP, that it has filed a lawsuit against streaming digital music company Spotify Limited and certain of its affiliated companies ("Spotify"). The lawsuit alleges infringement of five separate Nonend patents, each with a priority date as early as February 2001.

The lawsuit, which was filed in the United States District Court for the District of Delaware, further alleges that Spotify has and continues to infringe Nonend's patents by distributing Spotify client software and operating Spotify's popular digital music streaming service, which was introduced in North America in July 2011.

As the complaint explains, Spotify's service is different than other well known digital music streaming services in that Spotify's subscribers receive streaming music not only from Spotify's servers, but they also receive streaming music from other subscribers. This feature makes the Spotify service faster, more efficient, and less costly to operate, and is the technology at the heart of the Nonend patents. Indeed, Spotify touts this important feature as a key distinguishing technology over its competitors who only offer "pure client-server applications" in contrast to Spotify, which exploits a peer-to-peer "overlay" to substantially reduce costs and improve robustness of the service. Spotify's internal analysis shows that only 8.8% of its streaming content is delivered from Spotify's servers, while 35.8% is delivered from the Spotify's peer-to-peer subscribers.

Spotify's website states that the music service incorporated in 2006, five years after Nonend filed for its first patent. Spotify was originally launched in Europe in 2008, and was introduced to the U.S. market approximately one-year ago, on July 14, 2011. In one year, Spotify claims to have signed up over three million U.S. subscribers who have shared over 27 million songs, and listened to over 13 billion songs.

The complaint alleges that Spotify infringes the Nonend asserted patents by using Nonend's patented methods for streaming media, by employing peer-to-peer search, retrieval and playback techniques set forth in the Nonend patents. Nonend alleges Spotify used these inventions to design Spotify's popular music service, without Nonend's permission. According to Spotify, this technology saves the company substantial network costs and improves the quality over what would otherwise be deliverable to subscribers.