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
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.
So, Apple bought the patent?
Our US gov’t needs to rethink how the patent system works and revamp it. It’s broken, plain and simple.
Hey Jake, Apple may have bought the patent just to keep from being sued later. I don’t see them as going after all the other companies out there that have downloads.
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.
Relax, Jake probably works for Microsoft.
“This software is available in 19 countries where more than 450 million songs have been downloaded worldwide.”
450 million? They are probably nearing 2 billion.
“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.
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.
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.
Hey MDN,
Got a link for the full article?
Man, this patent sure does sound thin. The concept of selecting and downloading stuff has been around since before 1996, hasn’t it? And besides, don’t patents have to cover the actual implementattion of the idea, not just the idea.
Starkweather wrote the original Apple iTunes patent.
Whatever decision Apple came to in order to move forward, solidified its interests in content downloads.
Maybe Apple can somehow use this against Universal.
“YYYYYYYYEEEEEEEEEESSSSSSSSS”
^^^ Thats a 200 Billion Dollar “yes”
MWHAHAHAHAAHAHAHAH
CRUSH THEM!
@ CHM: exactly my thoughts…
Apple probably won´t charge, they´ll use it as leverage against record companies, MS, other DAP vendors etc… – as far as I see it, it is a monopoly in the making…
rgrds
Matt
Apple may decide to just go for royalties from the really ugly ones, like Microsoft Zune…!
Well, we still don’t see the terms of the settlement. I mean, you’d think Apple would control the patent after the negotiations. Why would they let something so “important” reside in the hands of a guy who didn’t know what the implications were for his own patent? At least he patented!
I found the article unnecessarily ambigous about who owns what. What’s going on here? Getting film makers to pay royalties on every download – what? That would be rich, considering the exact opposite is what’s been making the news lately, that is, proverbial “Hollywood” wants to charge Apple royalties on every iPod they sell, and such things.
Pay Universal $1 per iPod. Average number of songs downloaded per iPod = 25. Apple charge Universal $2.50 and makes $1.50 extra profit per iPod. They even make money when sold through a Zube!
Nice.
Maybe I’ll take out a patent on printing reports of current events on big sheets of paper and selling same. Or maybe a patent on traveling from one place to another in a motor car. Or putting tomatoes on a baloney sandwich. Or sleeping while lying down. The first thing we do, let’s kill all the lawyers.
mw: think – ha-ha-ha!
Holy Mackerel,
Yeah great, and all that profit sharing going on between Apple and the movie/tv industry adds up to higher costs for you and me. If the unnecessarily ambigous article is correct about its royalty flow direction, then I certainly don’t blame Apple for trying to do this, I mean it wasn’t Apple that started it, Apple’s just trying to protect its turf and its profit margins, and trying to do it without raising prices for us. I can only hope tha the outcome is a stalemate that doesn’t hinder progress and availability.
Jake’s assertion that the Supremes are “reviewing the U.S. patent system and considering reining in the current insanity” is so laughable as to be sad. Cases pending before the Court hardly constitue system governance opportunities. Such a statement reveeals a woeful misunderstanding of the legal system, the role of the court in the review of cases, and the potential impact on the patent system.
And ANY notion that, becauser a case is under review by the Court, a legal stakeholder should forebear from action to protect its stake is just prreposterous.
MW: “learned” as in “not Jake”
“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.”
-This would only effect patents granted going forward, unless someone wants to spend the money to challenge an exising one. Depending on how the supreme court would word a ruling, this may or may not happen with this one.
“If Apple thinks it’s going to cash in on all other vendors’ downloads, their hopes are likely to be dashed.””
– Why? Amazon has been very successful cashing in on many on-line sellers transactions (probably including Apple) because of the “one-click purchasing” patent they have.
“”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 also.
It does sound like the attorney is saying that Apple now controls the patent as a result of the settlement.
One useful application is that if Universal decides to go into a hissy fit at the bargaining table because Apple won’t give them a piece of iPod revenue, Apple could pull out the patent and make sure Universal pays Apple for every download on every piece of Universal content, whether it’s on iTunes, Napster, Real, or Zune Marketplace.
That would be really sweet to see.