From the article... "The label was alerted to the secret, virus-vulnerable software on its CDs long before the scandal broke. Trouble is, it didn't act immediately to alert consumers"
Yes, they knew and had been quietly alerted by F-Secure on October 4. That was about a month before Mark Russinovich publically revealed the Sony rootkit to the world.
This is a very good article with a lot of detail about what went on during that period.
Finally, I love this quote in the article:
"Making digital files not copyable is like making water not wet," says Bruce Schneier, chief technology officer at security consulting firm Counterpane Internet Security. "You can't do it. DRM is a desperate attempt to cling to their old business model. They have to figure out how to make money in the new world."
That says it well for me.