Attorney: Apple patent could require content providers, producers to pay royalties on every download

A recent out-of-court settlement between Apple Computer and the owner of the patent that covers the downloading of music and video with the ability to play music and video on a device (technology essential to the iPod and other music and video technology) has landed the attorney in the national spotlight.

Michael Starkweather is now commenting on the impact of Apple’s decision that affects “The future of the whole cell phone, iPod and PDA industry. That’s the billion dollar patent.” Starkweather believes that this patent has just overcome its first major legal victory. “I believe that, with this patent in hand, Apple will eventually be after every phone company, film maker, computer maker and video producer to pay royalties on every download of not just music but also movies and videos.”

This patent is considered by some to be one of the most important in years for the industry and in particular Apple. Since launching the iPod in 2001, iPod’s 3rd quarter 2006 sales accounted for 42 percent or about $4 billion, of Apple’s record-breaking revenues. If the patent had landed in the hands of Apple’s competitors, it would have seriously threatened Apple. Currently, the iTunes software, which is covered by the patent is the primary access point to Apple’s industry-leading iTunes Music Store. This software is available in 19 countries where more than 450 million songs have been downloaded worldwide.

Starkweather wrote the patent in 1996 for a Vermont inventor who originally didn’t show interest in patenting the idea or understand its value. The concept consisted of a desktop computer holding multiple songs with an interface allowing a hotel guest to select three songs and play them on an electric grand piano. Starkweather saw the broader value and broke the patent into three elements; remote music storage, selection of music to download and playing music on a music device. Starkweather realized that downloading movies was an obvious variation to downloading music. It was data manipulated in the same way. “Sometimes it’s easy to break an invention down to its key components,” Starkweather says. “That’s why patent writing is an art, not a science, and requires creativity.”

Starkweather began his career as a Patent Examiner in the U.S. Patent and Trademark Office, then served as in-house Patent Attorney for several major corporations, including Xerox Corporation, AT&T/NCR, Micron Semiconductor and IBM.

I.P. portfolio management has been a major focus for Mr. Starkweather. He has developed tools for executives to clearly “valuate” I.P. portfolios involving thousands of patents. Those valuations have been used to negotiate hundred million dollar mergers, acquisitions, and licensing deals.

Currently, Starkweather is practicing patent law in Salt Lake City at his law firm, Advantia Law Group which he founded. He is available for interviews on the recent settlement or in relation to corporate and patent law.

More about the patent in question: United States Patent #5,864,868 “Computer control system and user interface for media playing devices” here.

MacDailyNews Note: This is an interesting press release from the attorney involved, since before this was released, the terms of the Apple-Contois settlement were confidential. It sounds to us like Apple now controls this patent.

Related articles:
Apple settles Vermont man’s lawsuit against iTunes – September 01, 2006
Vermont man says Apple stole design for iTunes – June 14, 2006
Contois Music & Technology sues Apple for patent infringement in iTunes software – February 06, 2006
Apple sued over iTunes software interface; injunction sought to prevent iTunes distribution – June 20, 2005

31 Comments

  1. Apple may have jumped the gun on this one. The Supreme Court is reviewing the U.S. patent system and considering reining in the current insanity. The U.S. system is out of control and beginning to stifle innovation. If Apple thinks it’s going to cash in on all other vendors’ downloads, their hopes are likely to be dashed.

  2. “I doubt Apple wants royalties for this patent. The political fallout would be too great. The probably just want to keep it out of the hands of others where it could hurt Apple badly.”

    I agree. It could also be a nice bargaining chip.

  3. I think it’d be interesting if Apple *could* charge for royalties on downloads and then they could tell all the music and movie producers to go F themselves with their demands for a cut on iPod profits. You want a dollar for every iPod Apple sells? OK, sure. Apple wants 10 cents for every download of you music or movies. Who has the upper hand there? Apple. It’d be a great bargaining chip for them.

  4. While Apple may not choose to excercise this patent for all downloaded music and video, it could be used as a bargining chip in negotiations with the entertainment industry as they try to squeeze more profit out of the online distribution and the public.

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