LIQUID AUDIO TO SELL PATENTS TO MICROSOFT

With the completion of the pact, Liquid hopes to see SEC approval of its planned merger with Alliance (see story, 6/13). The digital music entity will then focus on distribution.

VP of Content Development and Label Relations Dick Wingate promises several "major, new, non-traditional affiliates" will be announced when Liquid rolls out its previously promised trove of Universal Music Group content.

While an SEC nod isn’t a given, Wingate believes it’s close. "We’re still awaiting formal approval," he says. "We’re not at the top of the SEC’s list."

Wingate adds that the sale of Liquid patents to Microsoft will also be advantageous in that defending intellectual property requires a considerable war chest of cash as well as time—Microsoft, he adds, has plenty of both.

Liquid will retain a royalty-free license for the tech covered by the patents.

A group of arbitrageurs—including some former executives from rival netcos—recently attempted to gain control of Liquid’s board, hoping to force the company to shut down and sell its assets. The upstarts purchased a large quantity of Liquid stock at its lowest ebb and hoped to profit from the sale. Their machinations frequently involved public statements about the imperiled future of the company.

Though they failed to win a majority of the board, they retain a presence there.