File sharing firms claim unlawful use of technology.

The warfare in the digital music world continues to rage on, as Woodland Hills-based file sharing companies Altnet Inc. and its parent company, Brilliant Digital Entertainment Inc., have sent letters to several file sharing firms--including LimeWire LLC, BearShare operator Free Peers Inc., Mashboxx and RazerPop. The letters allege that the companies were unlawfully using Altnet/Brilliant Digital's TrueNames technology in their products.

According to Altnet/Brilliant Digital attorney, Lawrence M. Hadley, the letters are less of a warning than an offer to license the technology in question.

"If they don't comply, we're certainly keeping the possibility of legal action open. However, both Altnet and Brilliant Digital are clearly willing to license their products. The terms of the eventual license would be open to negotiation. Whether payments would be for past use, or for ongoing royalties, the company is interested in discussion," Hadley, a partner at Hennigan, Bennett, and Dorman located in downtown Los Angeles, said.

Altnet and Brilliant Digital have both come under fire from the major record labels in recent years and are currently fighting them in a lawsuit in Australia. Altnet/Brilliant Digital business partner, Sharman Networks, makers of infamous file sharing network Kazaa, is also named in the Australian lawsuit. The business relationship between the three companies is unclear, but claims made at the trial allege that they are all under the same ownership.

While little action has occurred since the letters were sent out last month, the recipients of the letters have predictably had mixed reactions. Greg Bildson, the chief executive officer and chief technical officer of New York City-based LimeWire, dismissed the legitimacy of the claims. According to the website p2pnews.net, Bildson's newest product, LimeWire 4.2 was the most downloaded file-sharing program for the week ending January 30.

"Altnet has long been interested in trying to get other companies to bundle their software with their programs. It's a kind of adware that we're not interested in. We don't have adware and we're not interested in trying to bundle another person's software. We've never been too fond of Brilliant Digital, Altnet and their business relationship with Kazaa," Bildson said.

Unlike Bildson, Marc Freedman, the founder and CEO of Dallas-based RazerPop accepted the letters as a welcome business opportunity.

"We've been welcomed to work with Altnet in terms of licensing their secured files and being able to legally access the Kazaa network. I took that as a very welcome opportunity. On the flip side, the actual patent claim itself is questionable," Freedman said. "I think that we will end up licensing their network. The Altnet license download is important to us and it will help support our efforts to promote licensed content."

This is not the first time that Altnet has defended its patents. In December, Altnet and Brilliant Digital sued the Recording Industry Association of America and three companies that the record industry pays to track and disrupt the transmission of copyrighted songs over peer-to-peer networks. Altnet and Brilliant Digital claimed that the technology that the companies were using to disrupt the system violated their "hashing" patents. Hashing is a method for assigning a unique tag or "hash" to a digital file. By comparing the hashes, rather than entire files, file-swapping software can rapidly process users' requests for specific songs, movies or other files.

Marty Lafferty, CEO of the Digital Computing Industry of America, a p2p trade group dedicated to developing the technology through legal means, has worked with the parties involved, in order to help reach an equitable settlement. Lafferty believes that Altnet/Brilliant Digital's motives are less monetarily based as much as they are a desire to increase the legitimacy of peer to peer file sharing.

"I think Altnet's on its own mission to legitimize the channel. The DCIA tends to be a peace table among the various parties. One of our members got the letter and they responded by talking about licensing the intellectual property. It was something that wasn't previously on their radar screen. The companies that received letters tended to not be that sophisticated yet. Most didn't have a department working on intellectual property issues," Lafferty said.

Despite Lafferty's insistence that Altnet and Brilliant Digital are not trying to intimidate their competitors, doubts still remain in some people's eyes.

"There could be any number of reasons why they're doing this. I don't think they're trying to make money from the letters because they probably won't. Although if they could make money, they'd love that. If they could up their profile, they'd love that. If they could legitimize some future lawsuit against the p2p companies that are creating fake files, I'm sure they'd like that as well," Bildson said.