August 5, 2004 11:29 AM PDT

Virgin: Apple's not playing fair with iPod

French online music store Virgin Mega has filed a complaint against Apple Computer, claiming that the company's refusal to license the copy protection technology used in its iPod is harming competition.

The action was filed with the French Competition Council in June and disclosed along with several other legal matters on Thursday as part of Apple's quarterly filing with the U.S. Securities and Exchange Commission.

According to the filing, the online store, part of the Virgin family, is seeking various unspecified "interim measures," pending a decision on the merits of the case. A hearing on that request is expected in either October or November, Apple said in the filing.

An Apple representative declined to comment further on the Virgin dispute. A Virgin representative was not immediately available for comment.

A number of media companies, most prominently RealNetworks, have called on Apple to open up its FairPlay digital rights technology so that other digital music services can securely transfer files onto Apple's iPod player. FairPlay blocks people from making unlimited copying of songs but also makes sure that the iPod doesn't work with any other kind of copy-protected formats.

Apple has refused to unlock the software for other companies. Last month, however, RealNetworks released "Harmony", which it said is copy protection software engineered to be compatible with FairPlay that will also enable music purchased from Real to be securely transferred to and played on an iPod.

Apple has criticized the move as akin to hacking and warned that it could always break Real's approach in the next software update to the iPod.

Also in the SEC filing, the Mac maker noted that it has settled several actions, including a lawsuit with Tibco over the Rendezvous trademark and another suit over the technology used in the Apple PowerBook to make the keyboard light up. The company did not offer details but said that in both cases, the settlement would not have a material impact on its financial results.

An Apple representative declined to say what the impact of the Tibco settlement was and whether Apple will continue to use the Rendezvous name.

Separately, Apple has brought an end to a legal dispute over the iTunes Music Store, E-Data announced on Wednesday. The iPod maker has agreed to license patents from E-Data, which says its owns intellectual-property rights to the process of selling music online. Microsoft has also settled with E-Data.

Apple expects to capitalize $5 million worth of research and development costs related to its development of Tiger, the next version of the Mac OS X that is due out next year, the company said in the filing. It also anticipates recording about $5 million in restructuring costs related to vacating certain European sales offices in the current quarter.

The filing also stated that if Apple had included the cost of stock-based compensation as an expense, its earnings for the three months ended June 30 would have been 9 cents per share instead of the 16 cents reported in third-quarter earnings.

20 comments

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Quit whining and out-innovate!
What happened to the good old days when companies would actually work on out-innovating its competitors rather than dragging them to court? It seems we're creating a culture of sue-happy companies who feel it's easier to have their legal departments file suits than to have their engineers create.
Posted by mcps95 (3 comments )
Reply Link Flag
hear hear
Agreed. This reminds me of earlier in the year when the open source community tried to convince Sun that if they didn't give away java technology to the os community, that it would die a miserable death and be replaced by PERL.

HAHAHAHAHAHAHAHA!!!
....phew. Sorry 'bout that.

What Apple should do, is license the technology at a rate of $0.99 per song. That way, nobody could afford to sell a song for less than $1, like Apple does.
Posted by David Arbogast (1709 comments )
Link Flag
Quit whining and out-innovate!
What happened to the good old days when companies would actually work on out-innovating its competitors rather than dragging them to court? It seems we're creating a culture of sue-happy companies who feel it's easier to have their legal departments file suits than to have their engineers create.
Posted by mcps95 (3 comments )
Reply Link Flag
hear hear
Agreed. This reminds me of earlier in the year when the open source community tried to convince Sun that if they didn't give away java technology to the os community, that it would die a miserable death and be replaced by PERL.

HAHAHAHAHAHAHAHA!!!
....phew. Sorry 'bout that.

What Apple should do, is license the technology at a rate of $0.99 per song. That way, nobody could afford to sell a song for less than $1, like Apple does.
Posted by David Arbogast (1709 comments )
Link Flag
Not surprising.
They did it to Microsoft with its protocols and API, and now they're doing to Apple with their DRM and iPod. Considering that both companies have dominant product this type of action is not surprising. Now it's Apple's turn to fend off all the corporate lawyers who smell money.
Posted by unknown unknown (1951 comments )
Reply Link Flag
Not surprising.
They did it to Microsoft with its protocols and API, and now they're doing to Apple with their DRM and iPod. Considering that both companies have dominant product this type of action is not surprising. Now it's Apple's turn to fend off all the corporate lawyers who smell money.
Posted by unknown unknown (1951 comments )
Reply Link Flag
Virgin and Real
I wonder if Virgin is planning to take Real to task because they haven't opened up their Rhapsody store and Harmony technology to Mac users with iPods....seems like Real is restricting consumer choice.
Posted by Brich (11 comments )
Reply Link Flag
reply
The differance is that Apple has dominant position in music download service and portable player market . Real doesn't have either. I was against this when they did it to Microsoft over their APIs and network protocols because it sets a precident of punishing the leader of a market, and now (big surprise *sarcasm) they're trying to do it to Apple.
Posted by unknown unknown (1951 comments )
Link Flag
They Can't!!
Virgin and Real can't open their services to the iPod because Apple won't let them! But Apple will pay in the end, like soo many times before!
Posted by PCCRomeo (432 comments )
Link Flag
Virgin and Real
I wonder if Virgin is planning to take Real to task because they haven't opened up their Rhapsody store and Harmony technology to Mac users with iPods....seems like Real is restricting consumer choice.
Posted by Brich (11 comments )
Reply Link Flag
reply
The differance is that Apple has dominant position in music download service and portable player market . Real doesn't have either. I was against this when they did it to Microsoft over their APIs and network protocols because it sets a precident of punishing the leader of a market, and now (big surprise *sarcasm) they're trying to do it to Apple.
Posted by unknown unknown (1951 comments )
Link Flag
They Can't!!
Virgin and Real can't open their services to the iPod because Apple won't let them! But Apple will pay in the end, like soo many times before!
Posted by PCCRomeo (432 comments )
Link Flag
The Fall of the iPod!!!
For the past year it's been iPod this, iPod that. I am SICK of hearing about the iPod!! You would think it was the very first MP3 player to be manufactured. Yes, at one time I did like the iPod, but when I wanted to buy one and they wouldn't let me, nor neither of my sisters lease it, but now, I'm glad they wouldn't let me because the Dell DJ is MUCH better and is way better, but you never hear about it because all that's ever talked about the iPod. It has less battery life and is way more expensive with less storage, but yet it's still ranked #1.
Posted by PCCRomeo (432 comments )
Reply Link Flag
Re Fall of the iPod
Poor little Greg. No one wants to hear about your personal
problems. If just playing your music is all that matters, I am
sure the Dell is a fine product, in a provincial, primitive way. But
then I bet you think MS XP is a "way better" OS. Or maybe you
think a Yugo is a "way better" car also?
Posted by Brian Breeding (22 comments )
Link Flag
The Fall of the iPod!!!
For the past year it's been iPod this, iPod that. I am SICK of hearing about the iPod!! You would think it was the very first MP3 player to be manufactured. Yes, at one time I did like the iPod, but when I wanted to buy one and they wouldn't let me, nor neither of my sisters lease it, but now, I'm glad they wouldn't let me because the Dell DJ is MUCH better and is way better, but you never hear about it because all that's ever talked about the iPod. It has less battery life and is way more expensive with less storage, but yet it's still ranked #1.
Posted by PCCRomeo (432 comments )
Reply Link Flag
Re Fall of the iPod
Poor little Greg. No one wants to hear about your personal
problems. If just playing your music is all that matters, I am
sure the Dell is a fine product, in a provincial, primitive way. But
then I bet you think MS XP is a "way better" OS. Or maybe you
think a Yugo is a "way better" car also?
Posted by Brian Breeding (22 comments )
Link Flag
I am sorry to know
that Apple is run by simple geeks who can't smell
business opportunity.

First, they didn't licence the MacOs, and M$ took
advantage of the simpletons, gave the world a
choice, made untold billions, and left them with
3% share for the desktop market.

Perhaps they feel that "afterall, the money is in
the hardware". But some other folks are known to
have made this same colossal and classical
mistake.

Apple has tested the MacOs on the x86 platform and
claims that it runs just fine.
<a class="jive-link-external" href="http://www.pcworld.com/news/article/0,aid,113114,00.asp" target="_newWindow">http://www.pcworld.com/news/article/0,aid,113114,00.asp</a>
But Steve is afraid of M$. Take an analogy, The
Devil (I mean Satan -- the real one) does not play
fair. So what do you do? You defend yourself with
all you've got! Does M$ play fair? Certainy not.
for examples, what is M$ doing with Virtual PC
for Macs?

I can't tell for sure that MacOs on x86 will be a
runaway success but I really think that with the
way PC user are clamouring to an alternative to
Windoze, it is worth giving it a shot.

If you can't learn from your mistakes or other
peoples glaring gaffes, then you lack basic
survival skills and you are not just a simpleton,
you are a moron.

The iPod will eventually be replaced by other
hardware that make use of licensable technology.
Make no mistake about that.
Posted by (23 comments )
Reply Link Flag
I am sorry to know
that Apple is run by simple geeks who can't smell
business opportunity.

First, they didn't licence the MacOs, and M$ took
advantage of the simpletons, gave the world a
choice, made untold billions, and left them with
3% share for the desktop market.

Perhaps they feel that "afterall, the money is in
the hardware". But some other folks are known to
have made this same colossal and classical
mistake.

Apple has tested the MacOs on the x86 platform and
claims that it runs just fine.
<a class="jive-link-external" href="http://www.pcworld.com/news/article/0,aid,113114,00.asp" target="_newWindow">http://www.pcworld.com/news/article/0,aid,113114,00.asp</a>
But Steve is afraid of M$. Take an analogy, The
Devil (I mean Satan -- the real one) does not play
fair. So what do you do? You defend yourself with
all you've got! Does M$ play fair? Certainy not.
for examples, what is M$ doing with Virtual PC
for Macs?

I can't tell for sure that MacOs on x86 will be a
runaway success but I really think that with the
way PC user are clamouring to an alternative to
Windoze, it is worth giving it a shot.

If you can't learn from your mistakes or other
peoples glaring gaffes, then you lack basic
survival skills and you are not just a simpleton,
you are a moron.

The iPod will eventually be replaced by other
hardware that make use of licensable technology.
Make no mistake about that.
Posted by (23 comments )
Reply Link Flag
 

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