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Microsoft Acquires Rights To Liquid Audio

Liquid Audio, a leading provider of software, infrastructure and services for the secure digital delivery of media over the Internet, has entered into an agreement with Microsoft Corporation that will enable Microsoft to acquire the domestic and foreign rights to Liquid Audio's patents for cash consideration of $7 million.

Since its inception, Liquid Audio has been awarded several key patents related to its technology and product architecture. These include patents in the areas of digital rights management (DRM) together with technology for secure content transfer to portable devices as well as the ability to honor territorial restrictions for digital music content. In addition to the cash consideration, Liquid Audio will receive a royalty-free license to continue using the patented technology in its digital distribution system.

"Selling the rights to our patent portfolio to a leading technology partner such as Microsoft helps us shift our strategy in preparation for the merger with Alliance Entertainment," said Gerry Kearby, president and CEO of Liquid Audio, Inc. "This direction is consistent with our move away from product development and toward an exclusive focus on the digital distribution of media to the retail community, which is entirely complementary to Alliance's physical media distribution business for home entertainment products."