For a few fearful minutes in late 2004, iMesh co-founder Talmon Marco thought Garth Brooks had sunk his company.

Marco was in New York, showing off the technology behind the new iMesh peer-to-peer music service slated for release this Tuesday. The software was supposed to identify and block virtually any copyrighted song being downloaded from peer-to-peer networks. But this time, a Garth Brooks song picked at random seemed to download without any problem.

Bracing himself while sitting in a conference room with a team of lawyers from the EMI Group record label, Marco pushed “play.” The song started, and it was indeed the country crooner’s voice. But it was quickly interrupted by a burst of noise. The file was a fake, a “spoof” planted on the file-swapping networks to discourage pirates, and it turned out that Marco’s software had correctly let it through its filter.

“That was a moment,” Marco said, shaking his head during an interview with CNET News.com last week. “I thought, ‘Of course, the one time it doesn’t work is the time it needs to work.’”

After a year of such near-disaster moments, skeptical record executives have finally declared themselves satisfied with the new iMesh, which will relaunch Tuesday as the first unregulated peer-to-peer network to turn itself into a paid music service. But now it faces an even tougher audience: 5 million iMesh users who are used to free music.

iMesh is the first of several “label approved” peer-to-peer networks hitting the market this year after long delays in their development. Mashboxx, created by former Grokster President Wayne Rosso, is also slated to go live this fall.
Via ZeroPaid