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Discovery is arguing that Amazon violated a patent it received in November 2007 for an “electronic book security and copyright protection system [which] provides for secure distribution of electronic text and graphics to subscribers and secure storage.” Discovery founder John S. Hendricks is listed as one of the patent’s inventors.

That is, Discovery says Amazon ripped off its digital rights management scheme — the lock and key system Amazon uses to protect the books and other other publications it sells via its online store. It doesn’t want the court to stop Amazon from selling the Kindle (or its books), but it wants royalties, damages, etc.

One puzzler here is that Amazon introduced the Kindle, along with its e-book store, in November 2007. — the same month Discovery received its patent, which it applied for in September 1999. Another: Has Discovery gone after anyone else who’s sold a digital copy of a book using an encryption system — like, say, Sony (SNE), whose e-book reader and electronic bookstore predated Amazon’s?

Amazon declined to comment. Discovery declined to comment beyond the press release it sent out this afternoon announcing the suit:

SILVER SPRING, Md., March 17, 2009 /PRNewswire-FirstCall via COMTEX/ — Discovery Communications, Inc. (DISCA)(DISCB)(DISCK) today filed a patent infringement suit against Amazon.com, Inc. in the United States District Court for the District of Delaware, alleging infringement of a patent issued to Discovery Communications for electronic book technology.
Discovery Communications alleges that Amazon’s sale of the Kindle and Kindle 2 products and its electronic book delivery system infringe U.S. Patent Number 7,298,851, “Electronic Book Security and Copyright Protection System.” A copy of the filing can be found on Discovery’s web site: .
Discovery Communications and John S. Hendricks were significant players in the development of digital content and delivery services in the 1990′s. Hendricks’ work included inventions of a secure, encrypted system for the selection, transmission, and sale of electronic books.
Joseph A. LaSala, Jr., General Counsel of Discovery Communications, said: “The Kindle and Kindle 2 are important and popular content delivery systems. We believe they infringe our intellectual property rights, and that we are entitled to fair compensation. Legal action is not something Discovery takes lightly. Our tradition as an inventive company has produced considerable intellectual property assets for our shareholders, and today’s infringement litigation is part of our effort to protect and defend those assets.”

And here’s Discovery’s complaint, which includes the patent it says Amazon violated. Click the button on the top right to make the document full-screen.

discovery-communications-complaint – Free Legal Forms

And finally, here’s one of the many schematics included in Discovery’s complaint, which does sort of help illustrate why Discovery was thinking about e-book distribution years ago — it imagines a future where e-book consumption and a TV guide are intertwined.

One way to think about this is as a timeline–or a stream. As people share more, the timeline gets filled in more and more with what is happening with everything you’re connected to. The pace of updates accelerates. This creates a continuous stream of information that delivers a deeper understanding for everyone participating in it. As this happens, people will no longer come to Facebook to consume a particular piece or type of content, but to consume and participate in the stream itself.”

A heavyhanded explanation for a simplistic concept, but perhaps there is a deeper meaning to be found in our collective tweet of consciousness mutterings–“John is stuck at SFO,” “Beth is all liquored up,” “Adam is reminiscing about his days on the Newton”…“Mark has a laughably grandiose vision of his social-networking service.”

Or perhaps the deeper meaning here is to be found in another tweak Facebook is making to its service. As part of this redesign, the company is making profiles and pages the same thing. What that means is that pages created by public figures, organizations and companies will now look, feel and behave just like any other profile. Now their proprietors, too, can join “the stream.” “These folks will now be able to share status updates, videos, photos or anything else they want, in the same way your friends can already,” says Zuckerberg. “You’ll be able to keep up with all of their activity in your News Feed. This means that you can find out that Oprah is reading a book backstage before a show, CNN posted a breaking story or U2 is working on a new song, just as you would see that your friend uploaded new photos from her trip to Europe.”

Presumably, that also means folks like Microsoft (MSFT), BlockBuster (BBI) and Coca-Cola (KO) can also tip you off to the fascinating things they’re up to. So in the end, this redesign isn’t about the continuing evolution of the “social graph” or whatever the hell Facebook calls its network these days. It’s about developing a new advertising program that allows businesses legitimate access to the 175 million Facebook members the company has so far failed miserably to monetize.

I’ve been through the desert on a horse with no name/It felt good to be out of the rain/In the desert you can remember your name/’cause there ain’t no one for to give you no pain.

Actually, for Yahoo (YHOO), which is holding its big annual meeting of the company’s advertising sales staff in Indian Wells, Calif., maybe just a little pain since BoomTown is only a scant few miles away, as the crow flies, attending the Demo09 conference in Palm Desert.

Don’t worry, Yahoo PR, I will not crash the proceedings or be bribing the bartenders to get more leaks. But you Yahoos should still be careful with the wine in the hot tub anyway–as Carol says, loose lips sink ships!

The gathering–to which Yahoos were greeted at Palm Springs Airport by purple Yahoo-capped greeters and were ferried to the Marriott’s Renaissance Esmeralda Resort & Spa via limos, according to many Demo attendees who ran right into the phalanx–is being run by Yahoo sales head Joanne Bradford.

Bradford has the unenviable task of selling into the weak ad market and driving sales, despite a very troubled economy and a company trying to claw its way back to stability. And, of course, getting Yahoo’s much buffeted sales staff jazzed up to do so.

Bradford will be helped in inspiring Yahoo’s large sales staff with what is sure to be a cussing-good appearance by CEO Carol Bartz.

Just last week, Bartz announced a massive reorganization of the company’s management to streamline it and make decision-making quicker.

“She thinks it critical she be there to get the troops excited,” said a Yahoo in the know.

Ye-haw!

How much do I wish I were there to see that performance? Much! (Except for the part in which I would be thrown out on my keester by Bartz herself, despite my plan to disguise myself by wearing all the Yahoo swag I have collected over the years.)

Instead, I am riveted to the goings on here at Demo. Right now, for example, I am watching an it’s-always-darkest-before-the-dawn session with venture investors on the dire economic situation, and about to see a new “touch book” computer.

Video of that and more, of course, to come.

That seems to be the lesson in a flap between the paper and Newser, an aggregation site whose motto is “Read Less, Know More.” Newser, which links to and summarizes work from news sources from around the Web, routinely uses a logo from the source site as a visual shorthand. See example below.

If you clicked on the image, you’d find a Newser page with a two-paragraph summary of the Times story; the summary cites the paper and links back to the original article. Not good enough, according to a letter the paper’s legal department sent to Newser earlier this month.

Newser co-founder Michael Wolff sums up the paper’s complaint in a post he published today:

It seems that the Times doesn’t want us using an itsy-bitsy T logo to identify the Times as one of our sources. Out of the hundreds and hundreds of media oranizations we link to at Newser only the Times has raised this as an issue. Given its perilous financial state, you’d think the Times should surely be spending its money on solving other problems.”

What Wolff doesn’t mention: The Times also complained about his use of one of its photos, says spokeswoman Catherine Mathis. “We asked Newser to take down a photograph that they took from NYTimes.com, without permission (and misattributed) and we have asked them not to use our gothic ‘T’ logo,” Mathis says via email. “While we appreciate Newser linking to Times articles, we need to protect the use of our trademarks, such as the gothic ‘T.’”

Wolff says the letter he received was from Deborah Beshaw, whose LinkedIn profile describes her as an administrative assistant at the Times. He wouldn’t forward me a copy, but described it as legal boilerplate warning that the Times would “pursue all available remedies, both criminal and civil” unless Newser stopped using the logo.

It’s tempting to turn this into a bigger think piece about the nature of aggregation sites, the “link-based economy” and the suit the New York Times Co. (NYT) recently settled with GateHouse Media, which accused it of violating GateHouse’s copyright when the Times Co.’s Boston.com site linked to GateHouse sites.

But if this is really just about a photo and a logo, then there’s less fire than smoke here.

Even Wolff, who understands the value of a good headline as much as anyone, admits as much, saying that he’ll stop using the Times logo–if that’s what the Times really wants. “I could care less about their logo.” he says. “I would be perfectly willing to replace it with a skull and cross bones.”

Earlier this year, the music labels finally got Apple to agree to a tiered pricing plan–69 cents for old songs, 99 cents for most songs, and $1.29 for songs the labels think they can charge more for. And today, Apple (AAPL) introduces a new wrinkle–the “iTunes Pass.”

What’s that? Oddly enough, given Apple’s marketing mastery, the company doesn’t do a bang-up job of explaining it. But here’s the gist: Pay us a premium and we’ll give you a bunch of songs and some other stuff.

The first offering comes from EMI Music Group and Depeche Mode: $18.99 gets you the band’s new album, a bonus track and “great music and video exclusives before and after the album’s release over the next fifteen weeks.” The band starts a big tour in April, so presumably some of the bonus goodies will come from stuff that’s recorded on the road. The deal expires in mid-June, but you’ll be able to keep –permanently–whatever the band puts out until then.

Some of my blog colleagues are describing this as an Apple move toward subscription services, but that doesn’t make any sense. Subscription services give you access to whatever you want, as long as you’re paying a monthly fee (or a variation on that). This is just a fancy version of the old-fashioned upsell: Instead of paying $9.99 for an album, or 99 cents for a single song, Apple and EMI are trying to extract some high-margin extra dollars out of you.

Ever bought a value meal at McDonalds? Same deal.

And there’s nothing wrong with that. If the record labels are going to survive, they’re going to have find ways to get consumers to pay more than a buck a transaction.

Not sure how effective this method will be–even if you’re still a huge Depeche Mode fan, don’t you want to know in advance what you’re getting for your extra money? But doesn’t hurt to try.

Time for the obligatory YouTube clips! Here’s what I believe to be the band’s biggest hit (I’ll confess that I’m not a big DM fan):

And here’s my favorite Depeche Mode cover:

On Sunday, the company announced Elevate America, a three-year job-training effort aimed at giving people the technology skills they need to survive in the job market. Under the program, it will offer one million vouchers for Microsoft eLearning courses and certification exams, and expanded access to Microsoft-vetted technology literacy and skills training programs. “Millions of Americans don’t have the technology skills needed in today’s economy,” Pamela Passman, a Microsoft vice president, said in a statement. “Through Elevate America, we want to help workers get the skills they need to succeed.”

Well, the Microsoft (MSFT) skills they might need, anyway. Which is, obviously, in Microsoft’s best interests. The more Certified Technology Specialists it has in the market, the better.

Sirius XM’s deal with Liberty Media appears to be moving ahead as planned. This morning the company said that it has received the necessary Nasdaq approval to issue Liberty (LINTA) 12.5 million shares of Sirius (SIRI) preferred stock without shareholder approval. Normally, the company would be required to seek such approval, but because of its dire financial straits Nasdaq has lifted the requirement.

The real news is that the company is trying to resolve a looming debt problem by slashing its dividend. CBS’s quarterly payout to investors is dropping from 27 cents to 5 cents.

What CBS didn’t announce–the now de rigueur massive write-down that so many of its big media peers have rolled out this quarter. Then again, CBS (CBS) took a $14 billion hit in the previous quarter, so that may have been sufficient.

Moonves on the dividend cut and his company’s debt issue: “By taking this step now, we will further strengthen our financial flexibility to meet our debt obligations even in difficult credit markets, and still provide our shareholders with an attractive dividend.”

Sumner Redstone’s “it’s got to get better” quote: “We are clearly in the midst of one of the most difficult financial environments in history, with very little visibility on how long these economic conditions will continue or if there is worse to come. But one thing that is clear to me is that Leslie and his team are managing our businesses superbly with an eye toward future growth. CBS’s strength as a content provider will continue to position it for success.”

The breakdown:

CBS recorded revenues of $3.53 billion, just below Wall Street’s $3.56 billion consensus. Earnings from continuing operations were 20 cents a share, but strip out impairment charges and CBS would have notched earnings of 34 cents per share. That’s well above the consensus of 26 cents. [Apologies for flubbing this the first time out.]

TV: Revenue down eight percent, Operating income (before depreciation, etc) down 35 percent

Radio: Revenue down 18 percent, OI down 53 percent

Billboards: Revenue down 15 percent, OI down 51 percent

Publishing: Revenue up one percent! But OI down four percent

Quincy Smith’s Interactive group posted a revenue increase of 218 percent, but that doesn’t mean much given that CBS didn’t own CNET a year ago. If you include CNET’s results from last year, revenue increased one percent–not bad, compared to its peers.

If you’d said a year ago that a Web ad business posting a one percent increase is a good thing, you’d have been laughed off the Internet. But here we are. For the record, the unit recorded operating income of $51.7 million on revenue of $186.3 million.

Are you one of the CNET or CBS Interactive employees who got laid off last fall? Your collective sacking cost your former employer $2.6 million in restructuring charges.

That’s because the network will be delivering its March Madness coverage using Redmond’s Silverlight streaming media technology, which for some reason stirs apoplectic emotions among a subset of tech zealots. Supposedly these folks would rather look at a blank screen than use dreaded Microsoft (MSFT) tech.

Why? Got me. I downloaded Silverlight onto my MacBook to watch NBC’s Olympics Webcasts last summer. And whenever I could find the events I wanted to watch (much harder than it should have been), I got a really great picture on my laptop.

So did some 40 million other people, which was why Microsoft wanted so desperately to get the rights to the event–it is trying very hard to gain some ground on rival Adobe’s (ADBE) Flash technology, the de facto standard for Web video. So it spends a lot of time focusing on big Web video events where it can introduce its tech to consumers.

[UPDATE: CBS wants you to know -- see comment below -- that you don't have to use Silverlight to watch the games online.]

March Madness isn’t nearly as big as the Olympics, of course: Last year, some 4.8 million people watched the tournament via CBS’s Webcast. But it’s a very big deal for CBS (CBS), which generated more than $20 million in extra advertising revenue out of the event. No word on what Microsoft had to pony up in order to get the rights this year, but Les Moonves and company certainly didn’t give them away.

Recorded with a cellphone camera, the three-minute video featured a group of teenagers harassing a boy with Down Syndrome. Google quickly removed it. But not quickly enough. The clip was viewed some 12,000 times before it was pulled. Enough times to inspire an investigation into the issue, and now apparently, charges of defamation and breach of privacy.

Google, for its part, claims there is no basis for legal action against the four officials because they weren’t involved in the incident itself and the company isn’t required to monitor third-party content on its sites. Said a Google spokesman, “We believe that this proceeding is not about Google Video and what happened, but about the internet as we know it–an open and free environment.”

Recorded with a cellphone camera, the three-minute video featured a group of teenagers harassing a boy with Down Syndrome. Google quickly removed it. But not quickly enough. The clip was viewed some 12,000 times before it was pulled. Enough times to inspire an investigation into the issue, and now apparently, charges of defamation and breach of privacy.

Google, for its part, claims there is no basis for legal action against the four officials because they weren’t involved in the incident itself and the company isn’t required to monitor third-party content on its sites. Said a Google spokesman, “We believe that this proceeding is not about Google Video and what happened, but about the internet as we know it–an open and free environment.”