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Burst.com Sues Apple over Media-Streaming Patents

Posted by inet - 2006-04-20

The long legal battle between Apple Computer and Burst.com just became more complicated. On Monday, Burst.com filed suit against Apple, alleging that Apple's iTunes software as well as the media-streaming technology used in QuickTime violate Burst.com's patents.
Filed in Federal District Court in San Francisco, the suit claims that Apple failed to license Burst's technology when it introduced iTunes in 2002. At that time, Burst had filed a similar patent lawsuit against Microsoft.

According to Richard Lang, Burst.com's CEO, Apple might have mistakenly assumed in 2002 that Burst's patents would be invalidated during the Microsoft court case in which Burst alleged that upgrades to the 2001 release of Windows Media Player infringed on its media-streaming patents. In March 2005, Microsoft settled the suit with Burst, paying $60 million for a nonexclusive license to Burst's patents.

"While we had hoped to avoid litigation and negotiate a reasonable license fee, it is Apple's own actions that have forced our hand," Lang said in a statement. "We now look to the courts to reaffirm Burst's rights as innovators and to be paid fairly for our widely acknowledged contributions to the industry."

Patent Troll

The real trouble began after Burst contacted Apple in late 2004 about securing licenses to its technology. After the meeting, lawyers for Burst notified Apple that the company believed Apple had infringed on its patents.

The two companies held talks over the course of the next 12 months in an effort to reach a licensing agreement. However, in late 2005, talks between the two companies broke down.

In January 2006, Apple filed a declaratory relief complaint, requesting that a federal court determine that Burst.com's allegations of patent infringement are invalid. Court documents, filed by Apple, claim that in late 2005, in at least one written communication, Burst.com's attorneys threatened litigation against Apple.

The complaint also included an unequivocal refutation of infringement from Apple. "Apple denies that any of the patents in [the] suit are or have been infringed by Apple and disputes their validity."

At the time of the filing, a representative for Apple said, "Unfortunately, we have been unable to resolve the disagreement with Burst directly, so we are asking the court to decide."

Another Day, Another Suit

According to Lang, the company's patented technology deals with the delivery of music or video via the Internet "faster than real-time." Three of the four patents at issue are the same as those that were in question during the Microsoft suit, Lang said.

Lang also said the company would have opted not to resort to litigation, but had to defend the patent portfolio it had developed over an 18-year period.

If Burst.com prevails, the company is looking at a significant payday. Lang's lawyers point to other suits in which plaintiffs were awarded some 2 percent of revenues resulting from the infringement. That could equal as much as $200 million in Apple's case.

"We have a responsibility to protect our patents and to seek a fair return for the many years and tremendous investment in developing Burst technology," Lang said. "Apple's actions have forced our hand."

Apple representatives did not immediately return requests for comments on the Burst.com suit.

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