Apple chewed up by patent suits

By Paul Nasella
March 17, 2005


Two separate companies have filed patent suits against Apple claiming that Apple violated their patents relating to the Apple ipod and the iTunes Music Store.

Advanced Audio Devices LLC, based in Chicago, is suing apple claiming that Apple’s ipod violates a patent of theirs for a “music jukebox.”

The company’s patent on the device, which was filed with the US Patent and Trademark Office in August of 2000, was granted to them in July of 2003. The patent describes a music “jukebox” for storing a “music library,” a device much like the Ipod.

According to the patent, “The music jukebox includes a housing, audio input structure on the housing for receiving audio signals, audio output structure on the housing for outputting audio signals, and a data storage structure in the housing for storing audio signals.”

According to a article published on March 8, “the company [Advanced Audio Devices LLC] attempted to settle its claim with Apple in December, according to news reports, but was rebuffed by Apple.”

The other company filing suit against Apple is Hong Kong-based Pat-rights. They are filing suit alleging that Apple’s digital rights management technology, called Fairplay, violates Pat-rights patent that was granted to them in December of 2003.

“This is certainly a patentable technology,” he said in a prepared statement released in late February. “If iTunes does not patent it, there must be a very good reason for them not to do so; someone else has patented this.”

His company is seeking 12 percent of Apple iTunes music store sales and has given Apple 21 days to comply. If they do not comply within the three week time span, a copyright infringement suit will be filed.

According to a article published on March 9, “twelve percent represents a hefty sum, considering Apple shipped 4.58 million iPods during the first quarter of 2005 alone. What’s more, Apple announced [two weeks ago] that iTunes Music Store downloads have surpassed 300 million.”

If Pat-rights files suit, they will be seeking damages up to three times its original value. Be that as it may, a reasonable value has not yet been determined by the company.

However, lawsuits such as the ones being filed against Apple, are bound to happen. According to Michael Lasky, patent and trademark attorney at the Minneapolis-based Altera Law Group, “If a company is successful, especially a technology company, there will be patent suits.”

In the same TopTechNews article that was published March 8, he said that, “technologies like DRM – a relatively new strategy pushed to the public to stem the flow of digital music piracy – have several associated patents that have not yet been tested in the courts. Apple might find that the company’s Fairplay DRM technology could be a test case for new patent law decisions.”

“Courts are beginning to look more closely at suits involving technology and intellectual property,” said Lasky. “But there’s still a great deal left to be decided.”

This is an opinion echoed by Stephen Baker, director of industry analysis at the research firm NPD Group who said he is not surprised by the recent charges against Apple. “Patent lawsuits come with the territory,” he said.

In a article published on March 9, he said, “It is common for successful products and successful companies to face allegations from other companies claiming that they’ve done it before or done it better. It remains to be seen…whether these latest claims have any merit.”

Posted to the web by Shawn Rice

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Paul Nasella

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