Mashboxx Founder Threatens to Sue LimeWire

LimeWire recently unveiled a major initiative aimed at combining web-based communities, music and video content — as well as contextual ads — with P2P file-sharing. But Wayne Rosso, founder of P2P startup Mashboxx, believes that LimeWire’s ideas violate some of his company’s patents — and he told NewTeeVee this week that he’d “go after anyone who comes near to it.”
Mashboxx was supposed to be the first P2P outlet licensed by the music industry, but financing issues have put the company on life support. Rosso’s tough talk could just be part of his strategy to secure a new investment, but it’s also symptomatic of the many challenges on the road to monetizing P2P.

LimeWire CEO George Searle offered some insight into his company’s activities this week on the LimeWire blog. He talked about its upcoming music download store, as well as a new project called “LimeSpot,” which will offer bands and their fans forums, wikis and blogs. All of these web-based initiatives will tie into the LimeWire client — a client that has been found to be installed on roughly 18 percent of all PCs worldwide — in what Searle compared to Google’s Universal Search, whereby P2P search results are combined with context and contextual ads: “Soon, within LimeWire you’ll be able to connect with participating artists, and drill down or sideways to see photos, find tour dates, watch music videos, find lyrics and buy music, tickets and merchandise.”
LimeWire’s transition to a social media empire won’t be easy. The P2P company is already embroiled in a lawsuit with the major record labels. And now there’s Mashboxx. Rosso thinks his company owns IP for at least some of the functions Searle described. “We’ve got a broad umbrella of patents,” he told me. “I’d be more than happy to get in line to sue [LimeWire Chairman] Mark Gorton,” said Rosso.
The database of the U.S. patent office shows that Mashboxx applied for at least one patent for an “adaptive information network” that, among other things, delivers advertising and other web content based on the searches and file libraries of P2P users. LimeWire did not respond to a request for comment from NewTeeVee.
Rosso isn’t exactly new to the P2P and digital entertainment space, and he’s always been known for being frank and outspoken. After many years of working in the music biz, he became CEO of file-sharing company Grokster; he then went on to do a brief stint at the Spanish file-swapping service Optisoft before taking on his current position, head of what was supposed to be the first licensed P2P platform in the U.S. Mashboxx initially promised to deliver $40 million in revenue by the end of 2007 and more than double that figure in 2008, but then a big investor pulled out at the last second, according to Rosso, and development came to a standstill.
Rosso told me that he is working on a new deal and that Mashboxx might soon finally see the light of day. Emphasizing the value of your IP can obviously be a part of the negotiations when you’re trying to secure the future of your company, but the threat of patent lawsuits is all too real for companies trying to monetize P2P.
Case in point: L.A.-based Kazaa affiliate Altnet has been suing players in the P2P space left and right over what’s little more than a checksum used to authenticate files within a P2P environment. These lawsuits started before startups like Skyrider secured a whopping $20 million for P2P-based advertising, and before anti-P2P outlet MediaDefender began to offer its customers P2P marketing tools.
There is a huge opportunity to monetize the billions of search requests and downloads that get facilitated through P2P networks every day — but the rising interest in the space will also raise the bar and quite possibly the IP licensing costs for everyone looking to get involved