Apple Computer sues Burst after negotiations over iTunes, iPod patent licenses breakdown

Burst.com, Inc., an innovator and provider of media delivery technology, was sued in U.S. District Court in San Francisco yesterday by Apple Computer for declaratory relief, alleging patent invalidity or non-infringement. The suit follows a breakdown in protracted negotiations for issuance of a license of Burst’s patents to cover Apple’s iPod and iTunes products. Burst anticipates responding to the complaint and filing a counterclaim for patent infringement shortly. Burst remains committed to the enforcement of its intellectual property and looks forward to successfully resolving this litigation through a license covering Apple’s Quicktime, iPod and iTunes products, including Apple’s iTunes Music Store.

Last year, Burst settled its patent and antitrust suit against Microsoft with Microsoft taking a license to Burst’s patents and paying a lump sum of $60 million. Since the Microsoft settlement, the company has been in patent licensing discussions with several companies engaged in the distribution of audio and video content on computer networks.

Burst.com, headquartered in Santa Rosa, California, is the developer of Faster-Than-Real-Time™ and Burst-Enabled™ video and audio delivery software. Burst.com’s Burstware® provides high-quality delivery of full-motion video and CD-quality audio over IP-based networks. The company, established in 1990, has built an international patent portfolio covering bursting, video delivery scheduling and Rapid-casting. Burstware®, Faster-Than-Real-Time™ and Burst-Enabled™ are trademarks of Burst.com. More information about Burst.com is available at http://www.burst.com/
Does this lawsuit telegraph something about Apple’s future plans for delivering media content? (See If Front Row can stream movie trailers from Apple, why not whole movies?) Does this action so close to Macworld Expo scuttle any of Steve Jobs’ announcements or does it support rumors of Apple’s planned video distribution system? And was that reported increase in .Mac bandwidth from 10GB to 1TB per month really just a “mistake” by Apple?

Monday, January 02, 2006

On December 10, 2005, we covered an article by Robert X. Cringely, in which he wrote:

Streaming likes to have as much bandwidth as possible RIGHT NOW. To make streaming of high-bandwidth content as painless as possible, Apple would need the kind of distributed architecture I’ve been describing at Google. Maybe Apple has that, but if they do, nobody has told me,. There are ways around this technically. Maybe Apple is using the Akamai network or its equivalent. Maybe the distribution system leverages peer-to-peer in the same manner as BitTorrent. Maybe there is some secret technology Apple will pull out from behind Door Number Three. But whatever technical solution Apple presents, the company will still have a LEGAL problem. No matter how I look at it, this supposed Apple announcement clearly bumps into the claims of little Burst.com and its nearly 40 video distribution patents. Burst has been quiet lately, which could mean something or nothing. Certainly, they haven’t announced that Apple has bought a license like Microsoft did last year for $60 million. If Apple introduces this video service as described but without a license, Burst will undoubtedly try to shut it down. So if you believe the rumor, then look for an Apple/Burst announcement. I’m not sure yet what I believe.

Cringely’s article followed a December 02, 2005 reports from Think Secret’s Ryan Katz:

Apple is planning to unveil a robust new content distribution system in January at Macworld Expo alongside its revamped media-savvy Mac mini, Think Secret has learned. The new content system and related media deals, which will include feature-length content, expanded televisions offerings, and more, will further cement Apple’s increasing lead in digital media delivery. Apple’s new technology will deliver content such that it never actually resides on the user’s hard drive. Content purchased will be automatically made available on a user’s iDisk, which Front Row 2.0 will tap into. When the user wishes to play the content, robust caching technology Apple previously received a patent for will serve it to the users computer as fast as their Internet connection can handle. The system will also likely support downloading the video content to supported iPods but at no time will it ever actually be stored on a computer’s hard drive. This method, which will be every bit as simple and straightforward for consumers as the iTunes Music Store is now, poses a number of advantages over Apple’s current pay-once-download-once system, including saving users’ hard drive space and essentially providing a secure back-up of everything purchased. Alongside this announcement Apple will also be rolling out a number of new partnerships with various content providers. Those Apple has not signed at the time of launch, one source speculated, will likely want to jump on the bandwagon soon afterwards, not unlike the vast number of additional record labels that were added to the iTunes Music Store soon after its inception.

There’s nothing to stop Apple from launching something and working out the legal niceties at a later date.

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Related article:
If Front Row can stream movie trailers from Apple, why not whole movies? – January 06, 2006
‘Kaleidoscope’ harbinger? Apple increases .Mac bandwidth from 10GB to 1TB per month – January 02, 2006
Cringely on rumored Apple ‘video locker’ content distribution system – December 10, 2005
RUMOR: Apple to debut new distribution system, partners for feature-length, TV, and video in January – December 02, 2005

34 Comments

  1. Does this lawsuit telegraph something about Apple’s future plans for delivering media content?

    Yup. Cringely talked about this.. if Apple wants to stream from IT’S servers.. (movie rentals) it NEEDS access to Burst’s patents… that’s what this is about..

    If Apple is somehow not ‘allowed’ to license, then they’ll bitch.

    The only thing.. how can you watch movies on an iPod, if they’re just being streamed?

    I guess you can’t.

  2. Can’t we all just get along? Don’t steal. Don’t be evil. If you have a technology to package and sell, do it. If you don’t sell it, or use it yourself, then the patent should be revoked in a year or three so others may use the technology.

  3. DudeMac,

    You don’t know the details of the Apple and Burst.com talks or the technologies and licenses involved, so your decision to immediately castigate Apple is telling and foolish.

  4. Technology patent law is more about look and feel than about the tech behind it.
    For example, Amazon patenting One-Click Purchasing. What the heck is that?

    Just come up with a unique idea and patent it. Almost as bad as when cybersquatters were buying website names.

  5. HAPPY 6th BIRTHDAY, OS X!!

    Strong and heathy with over 18 million users, and NOT ONE hint of an impending virus or other malware.

    Thank you, Apple, for making a computer system that enhances my life, and not burden it.

  6. Ooooooooo so close to Macworld…and Steve´s panties are all bunched up tight. This is not good for his upcoming speech….not good for his grand plan…not good at all.
    Can´t you imagine Steve just bouncing off his APPLE Hqs. office walls with this one, screaming and yelling and…”We´re Apple, we have the grand vision, we have iPod…I am Steve Jobs! I own Pixar! How dare this little burst thing spoil my fun, my speech, my grandstanding, my followup interview with Katie Kouric on NBC Today and that article in Newsweek may have to be scrapped. Oh, whoa is me…and even all the air has been let out of my introducing an new Intel iBook since Intel and Dell and everyone else already showed the Yonoh-Processor Dual-Core Centriino chip technology at CES YESTERDAY!!!!”
    And Steve will go on, “And Sony´s new Vaio laptop has a carbonfiber body – we were going to show that! And Dell has a 17-inch based Yonah-chip out…we just have the lowly 13-inch iBook to show…and a macmini that we can´t show because of Burst blocking us…And ACER brought out a Yonah-Intel laptop with a built-in camera in the lid – I was going to introduce that gimmick to the world, but now we have been beat!”

    Then some underling will cough, “We told you APPLE should be at CES first to intro our stuff instead of later at MacWorld…”

    “OFF WITH HIS HEAD!!!!” screams the Steve.
    ——

    Well at least MDN is hiding all news about the new Intel chips and laptops (which have the same specs as the new Apple laptops will have) that have already been introduced so that Mac people will be “surprised” come next week.

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