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Last Updated: Monday, 4 September 2006, 20:55 GMT 21:55 UK
SanDisk faces MP3 licence dispute
SanDisk HQ in California
SanDisk insists it is not infringing the patent on MP3
Electronics manufacturer SanDisk is facing a legal fight over its use of popular MP3 compression technology.

German officials seized MP3 players from SanDisk's booth at the IFA show in Berlin after an Italian patents firm won an injunction against the company.

Italian patents company Sisvel alleges that SanDisk refuses to pay licensing fees it needs to playback MP3 files.

SanDisk also faces a lawsuit brought by Sisvel in a German court, but denies that its products infringe patents.

SanDisk has recently launched new MP3 players based on flash memory, with capacities of up to 8GB, in an attempt to challenge the dominance of Apple's iPod nano.

But a raft of new products were removed from the company's stand at the IFA show in Berlin after Sisvel applied for an injunction, Sisvel told the BBC News website.

'No progress'

According to Giustino de Sanctis, head of Sisvel's US-based subsidiary Audio MPEG, SanDisk's refusal to purchase an MP3 licence leaves them out of step with some 600 other manufacturers and software developers.

SanDisk Sansa e280 audio player
The 8GB Sansa e280 has been removed from the IFA show
"By definition you have to follow the standard," Mr de Sanctis said.

Mr de Sanctis said the fact that SanDisk players were able to play MP3 files meant the company was legally required to purchase a licence.

"It is just not possible to do it any other way," he said.

Mr de Sanctis said the Berlin criminal court issued an injunction against SanDisk and officials visited the company's booth at the IFA show to seize and remove MP3 players.

"We are not getting anywhere with them," Mr de Sanctis said, explaining the decision to apply for an injunction.

"We have 600 licensees and we have to protect their rights, and the rights of the patent holders," he added.

Sisvel's founder Roberto Dini told the website DigitalLifestyles.info that SanDisk could gain an unfair edge over competitors and could potentially offer trade customers at the high-profile German show a lower price for its MP3 players.

"This is unfair competition," Mr Dini told DigitalLifestyles.info.

Complex compression

SanDisk, which is one of the world's leading manufacturers of flash memory products, acknowledged that it was facing a legal challenge over its MP3 players.

However, the company would not comment on Sisvel's claim to have won an injunction in Berlin.

SanDisk's IFA stall (Pic: DigitalLifestyles.info)
SanDisk's IFA stall was left almost empty (Pic: DigitalLifestyles.info)

In a statement, SanDisk confirmed it is facing legal action in a court in Mannheim, Germany - a separate action also brought by Sisvel - but defended its audio technology.

"SanDisk is showing that its MP3 players operate a technology which is completely different from a certain audio data transmission and reception techniques that has been patented for Philips and others many years ago.

"An expert opinion from one of the founders of MP3 digital audio compression substantiates SanDisk's position. SanDisk is not infringing any patent in the pending litigation."

The MP3 compression algorithm emerged in the 1990s following development efforts by two sets of technology companies and institutes.

Sisvel and its US subsidiary Audio MPEG issues MP3 licences on behalf of Dutch firm Philips, a French firm and a German research institute.

Another firm, Thomson, issues licences on behalf of a second group of developers.


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