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Patent Suit Challenges Apple iTunes Store and iPod

Jennifer LeClaire, newsfactor.com Thu Mar 13, 4:41 PM ET

On Wednesday, ZapMedia Services filed a patent-infringement lawsuit against Apple. But this time it's not over the iPhone. The Atlanta-based company alleges Apple's iTunes Store and iPod music players infringe on its patented methods for distributing digital media over the Internet. ADVERTISEMENT

ZapMedia Services sued Apple in U.S. District Court for the Eastern District of Texas, a venue known for its friendly stance toward plaintiffs. ZapMedia Services claims the lawsuit comes after multiple attempts to resolve its concerns with Apple over infringement of ZapMedia Services' patents.

"The complaint alleges that ZapMedia Services' property is being exploited in a manner which is unlawful, and by law ZapMedia Services is therefore entitled to a reasonable royalty on Apple's revenues related to the infringement," said Steven G. Hill, of Hill, Kertscher & Wharton, LLP, ZapMedia lead litigation counsel.

Two Patents Granted

Here's the story as ZapMedia Services tells it: Beginning in the late 1990s, ZapMedia, the predecessor of ZapMedia Services, created a digital media platform. As part of its strategy, ZapMedia developed a system by which it could provide hardware, software and content to consumers to allow them to gain control over their digital media assets.

In 1999, ZapMedia applied for two patents, each of which is entitled "System and method for distributing media assets to user devices via a portal synchronized by said user devices." One of the patents was granted in March 2006. The other was granted Tuesday.

In the course of its efforts, ZapMedia Services said it met with many major technology and media companies around the globe, including Apple, to describe its vision in great detail. Without asking ZapMedia Services for permission, the company claimed, Apple unveiled its own system. Apple announced its iPod MP3 player with an integrated iTunes software application in October 2001 and its iTunes Store in April 2003.

ZapMedia Services said it made Apple aware of the patents and their availability for license in June 2006 and continuing through the fall of 2007. "When someone takes our vision and our intellectual property without a license after several attempts, we have no option but to protect it through every means available to us," said Robert J. Frohwein, general counsel of ZapMedia Services.

Apple's Side of the Story

Apple was not immediately available for comment to tell its side. Apple's standard policy is not to comment on pending lawsuits.

But Phil Leigh, principal analyst at Inside Digital Media, has watched Apple deal with patent lawsuits over digital media for years.

"Apple is one of the hardest companies to get a license royalty from. If so far Apple has ignored ZapMedia [Services], there is no doubt that Apple will contest this claim," Leigh said. "Apple is one of the most reluctant companies to believe that the intellectual property it is using was originated somewhere else."