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From the website...
- Liquid Audio is a leading provider of services and software that enable musicians, record labels and music retailers to digitally-deliver professional-quality music via the Internet. Formed by veterans of the music industry and professional recording engineers, Liquid Audio is leading the convergence of music and technology to establish the Internet as a new medium for music distribution. The company's products and services are based on an open architecture that supports many leading digital music formats, including Dolby AC3, AAC, and MP3. This open architecture will also enable Liquid System products to be compliant with the goals of the Record Industry Association of America's Secure Digital Music Initiative (SDMI).
Apparently they have some sort of song tracking system that can be used for TransCopyrighting files. They have licensed this technology to Napster (http://www.napster.com/pressroom/pr/LiquidAudio.html).
See also LicensingMusic.