Apple Settles I-Tunes Patent Case

by Glen Shapiro, LawAndTax-News.com, New York

10 August 2004

Apple last week settled a lawsuit brought against it by E-Data Corporation (EDC) relating to an alleged patent infringement by the iTunes Music Store. EDC has patents in Europe and the US covering the distribution of digital content over electronic and wireless networks. The key patent, named 'Freeny' after its inventor, deals with downloading to a 'material object', eg an iPod.

Apple has made a payment covering past use of the patent and has licensed EDC's intellectual property for future use. The terms have not been disclosed. The Freeny Patent has had a controversial history, culminating in a US appeal court ruling in 2000 whcih found that the patent did not cover sales of digital products downloaded only to PC hard drives, but might apply when digital products have been downloaded, streamed or copied to CD, paper or other storage media.

Although the patent expired in January 2003, EDC is suing 14 other companies including Amazon.com, Ticketmaster, the New York Times and Hallmark Cards. Said Bert Brodsky, chairman of EDC: "These 14 companies have violated our patents. We have a very strong track record enforcing our intellectual property rights, as evidenced by our favourable decision with the US Court of Appeals, and our recent settlement with Apple Computer.” EDC is also suing a number of European companies.

The Freeny Patent is described as follows in the official listing: 'The present invention contemplates a system for reproducing information in material objects at a point of sale location wherein the information to be reproduced is provided at the point of sale location from a location remote with respect to the point of sale location, an owner authorization code is provided to the point of sale location in reponse to receiving a request code from the point of sale location requesting to reproducing predetermined information in a material object, and the predetermined information is reproduced in a material object at the point of sale location in response to receiving the owner authorization code.'

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