Features

REDWOOD CITY — Internet music software maker Liquid Audio Inc. said Monday it has agreed to sell its patents rights to Microsoft Corp. for $7 million in cash. 

Liquid Audio, based in Redwood City, makes software that allows consumers to listen to, download and buy music off the Internet. 

In contrast to the MP3 format, Liquid Audio’s secure format is more to the liking of record labels that want to sell copyright-protected music over the Web. 

The assets to be sold to Microsoft include patents on digital-rights management technology, and technology for secure content transfer to portable devices. 

Liquid Audio said the sale is part of a shift in strategy in advance of its merger with Alliance Entertainment Corp.