E-Data Corp. suffered a major setback in efforts to license pre-Internet technology to hundreds of companies doing business online, conceding initial defeat in a patent infringement suit against a handful of defendants who refused pay for use of its intellectual property.

E-Data agreed that companies transmitting software over the Internet to buyers using home computers do not infringe on its so-called Freeny patent given the way the New York District Court construed its patent claims. However, the company has asked the Federal Circuit U.S. Court of Appeals in Washington, D.C., to overturn the lower court’s interpretation of its claims.

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