Destiny Sues Musicrypt, John Heaven and Clifford Hunt
May 4, 2007 at 5:45 AM (PT)
DESTINY SOFTWARE PRODUCTIONS INC. has filed a lawsuit in ONTARIO Superior Court, ONTARIO, CANADA, against MUSICRYPT and two of its officers, JOHN HEAVEN and CLIFFORD HUNT, claiming CDN$25 million in damages for defamation and injurious falsehood, breaches of the Trade-marks Act and Competition Act, and interfering with DESTINY's economic interests.
DESTINY CEO STEVE VESTERGAARD said, "DESTINY's proprietary PLAY MPE digital media distribution system has been overwhelmingly embraced in the U.S. market, where it has been used to distribute more than 10 times as many pre-release songs to radio and other trusted recipients in the U.S. as the nearest competitor. We recently launched PLAY MPE in CANADA, and several music labels, including two major labels, have already begun servicing radio stations in this market using our system.
"MUSICRYPT has threatened a number of DESTINY's CANADIAN customers with legal action merely for using our PLAY MPE system. MUSICRYPT, Mr. HEAVEN and Mr. HUNT have sent letters and made phone calls to our customers making a number of inaccurate and misleading statements that are defamatory to DESTINY and that appear intended to damage our business reputation and economic interests in CANADA. We are therefore taking legal steps to ensure that our shareholders are fairly compensated for the harm caused by the defamatory statements being made about our system, and to prevent our customers from facing such threats in future."
In 2005, DESTINY learned that MUSICRYPT had sent letters to PLAY MPE (then known as PROMO ONLY MPE) customers claiming that content that originated in the U.S. and distributed through PLAY MPE was infringing MUSICRYPT's CANADIAN patent 2,407,774 (the "774 patent") issued that year. "As we have set out in our statement of claim," VESTERGAARD explained, "we believe that this patent is not valid, as there are numerous examples of prior art, including DESTINY's own MPE software engine which has been available since 1999. We also believe that our PLAY MPE system does not even contain the essential features described in the 774 patent, so does not infringe the patent."