Burst.com files countersuit against Apple

[AppleInsider]

Burst.com on Monday filed counterclaims accusing Apple Computer of infringing four of its U.S. patents, the Associate Press is reporting.

The claims, filed in the Federal District Court in San Francisco, allege that Apple's iTunes store, software and iPod devices infringe upon four patents owned by Burst.com. The company is seeking royalty fees from Apple and an injunction against further infringement.

Santa Rosa, Calif.-based Burst develops digital media delivery technologies for audio and video content.

The filings are in response to a suit that Apple filed against Burst in January, seeking a declaration that Burst's patents are invalid and that Apple does not infringe them.

According to coverage by BizJournals, Burst requests in its counterclaims that Apple pay a "reasonable" royalty.

The media company is represented by San Francisco law firm Hosie McArthur, which also represented Burst in last year's litigation against Redmond, Wash.-based Microsoft Corp. Microsoft settled that litigation by paying Burst $60 million for a non-exclusive license to Burst's patents in March of last year.

Burst has also reportedly expanded its legal team in the Apple litigation to include Palo Alto-based intellectual property firm Carr & Ferrell, LLP, as well as the Seattle office of Susman Godfrey, LLP and Houston-based intellectual property firm Heim, Payne & Chorush, LLP.

[ View this article at AppleInsider.com ]

[geo06]

Everybody is so greedy these days. Everyone wants to find a quick fix of money for anything that makes some.

[Elixir]

seriously the patent process needs to fucking change, and change fast.



for god sakes 10 different people can prob come up with the same idea that are similiar to eachother.



i mean unless its a blatant copy....



for christ sakes.

[SpamSandwich]

Hard to believe, but one can actually make a decent living by having the foresight to develop patentable ideas that the big boys don't have the minds to exploit (since it's usually just outside of their core competancy) and license them back to those large, slow corporations. There's nothing wrong with this practice, and with reasonable royalty rates in place, no one gets hurt. 8) And before anyone disputes this, I also speak as an AAPL stockholder, so... chill dudes.

[Gene Clean]

Originally posted by geo06
Everybody is so greedy these days. Everyone wants to find a quick fix of money for anything that makes some.

Did you miss the part where it says countersued Apple?

[sandboxface]

I don't feel the least bit sorry for Apple. Apple has sued many to 'protect their name' and 'protect their IP'. Several of those cases were way over reaching IMO. I'm a shareholder too.

I agree that the patent system must change, and I think there is a tremendous amount of opportunity for Apple if they decided to lead in that direction. The US patent system is outdated. It fails to address the acceleration of technology. It is doing more harm than good, especially in the pharma industry.

[gregmightdothat]

Originally posted by Gene Clean
Did you miss the part where it says countersued Apple?

It's illegal to "knowingly infringe on a patent." Therefore it's typical practice, upon learning of infringement, for the infringing company to immediately sue the owner of the patent. While that sounds evil, in case they lose, the damages are far less.

[gregmightdothat]

Originally posted by sandboxface
I don't feel the least bit sorry for Apple. Apple has sued many to 'protect their name' and 'protect their IP'. Several of those cases were way over reaching IMO. I'm a shareholder too.

I agree that the patent system must change, and I think there is a tremendous amount of opportunity for Apple if they decided to lead in that direction. The US patent system is outdated. It fails to address the acceleration of technology. It is doing more harm than good, especially in the pharma industry.

How does it do more harm than good in the pharmaceutical industry?

Granted, Pfizer, et. al. are heartless, money-grubbing bastards. But do you have any idea how much it costs to develop drugs, and then do trial testing for FDA approval? Versus how cheap it is to actually make drugs? While drug patents probably last a little too long, the pharmaceutical industry depends on short-term drug monopolies to recoup the billions spent on R&D. Once that patent runs out, a drug is no longer profitable as smaller pharmaceuticals with no R&D expenses launch the drug into a price war.

[melgross]

Most patents that are challenged end up being invalidated. But there's no quarantee.

I wonder why MS agreed to pay $60 million? That seems to be a lot, considering tha they aren't directly involved in a business that needs them. They could have made changes to the software.

Apple is in a different position. They are far more dependant on those patents.

Now, if I were the kind of person who believed in conspiracies, I would say that MS was being very clever in paying out that Royalty.

$60 million means nothing to them. The legal costs would have been less.

But, by agreeing to that sum for what MS does, sets a standard for future payments.

Future payments means Apple. If Apple loses, it could easily mean several times that.

[jasenj1]

In today's patent and business climate you're not successful unless someone is suing you. Success draws lawsuits.

The patent system is horribly broken. I read somewhere - been a while now, I forget where - that the current policy on patents is to grant them, then let the courts sort it out. A policy which I suppose can be interpretted to mean the government doesn't have the will/money to do the research to decide whether patent applications are valid so they'll just let interested parties figure it out after the fact.

On the one hand, this technique generates expensive lawsuits - a case of "if you can afford it, you can defend your patent". On the other hand, it keeps the patent office from doing lots of needless research on patents that no one cares about.

- Jasen.

[Chris Cuilla]

Originally posted by melgross
I wonder why MS agreed to pay $60 million? That seems to be a lot, considering tha they aren't directly involved in a business that needs them. They could have made changes to the software.

Apple is in a different position. They are far more dependant on those patents.

Now, if I were the kind of person who believed in conspiracies, I would say that MS was being very clever in paying out that Royalty.

$60 million means nothing to them. The legal costs would have been less.

But, by agreeing to that sum for what MS does, sets a standard for future payments.

Future payments means Apple. If Apple loses, it could easily mean several times that.

Now you are starting to see the entire chess board.

[Nautical]

Originally posted by melgross
Most patents that are challenged end up being invalidated. But there's no quarantee.

I wonder why MS agreed to pay $60 million? That seems to be a lot, considering tha they aren't directly involved in a business that needs them. They could have made changes to the software.

Apple is in a different position. They are far more dependant on those patents.

Now, if I were the kind of person who believed in conspiracies, I would say that MS was being very clever in paying out that Royalty.

$60 million means nothing to them. The legal costs would have been less.

But, by agreeing to that sum for what MS does, sets a standard for future payments.

Future payments means Apple. If Apple loses, it could easily mean several times that.

Not to mention the fact that the 60 million should come quite in handy for Burst.com when they are duking it out with Apple in the courts. Microsoft just added a lot of money to the Burst.com warchest.

[slughead]

There are two parts to patents: the Actual patent and enforcing it in court.

Apple all but lost its case against M$ when they sued for the obvious infringements over M$ copying Apple's OS. This was APPLE'S fault, according to our system, simply because their court case was a joke. They were mainly just joking around in court and when M$ saw they weren't serious, they settled for a measily few hundred million (in stock, no less) even though they had made tens of billions off of windows at that point.

To big tech companies, stealing or inadvertantly using someone else's idea is common practice, and considered an expense. Almost always, they are settled out of court for less than .1% of the profits gained from their theft.

There are what? 10 million patents out there? yeah, I don't think anyone has time to make sure they're not violating IP.

[melgross]

Originally posted by slughead
There are two parts to patents: the Actual patent and enforcing it in court.

Apple all but lost its case against M$ when they sued for the obvious infringements over M$ copying Apple's OS. This was APPLE'S fault, according to our system, simply because their court case was a joke. They were mainly just joking around in court and when M$ saw they weren't serious, they settled for a measily few hundred million (in stock, no less) even though they had made tens of billions off of windows at that point.

To big tech companies, stealing or inadvertantly using someone else's idea is common practice, and considered an expense. Almost always, they are settled out of court for less than .1% of the profits gained from their theft.

There are what? 10 million patents out there? yeah, I don't think anyone has time to make sure they're not violating IP.

Apple wasn't joking around in court. They had made some serious mistakes when they granted MS a license to use the elements of windowing in the first place.

The purpose of those licenses was to have MS write programs for the Mac that would use those elements for those programs.

But, apparently, they, and their lawyers, failed to make the licenses specific enough. It turned out that the liceneses granted MS the right to use the windowing features for anything they wanted to, including for their own OS.

[pmjoe]

Originally posted by gregmightdothat
do you have any idea how much it costs to develop drugs, and then do trial testing for FDA approval? Versus how cheap it is to actually make drugs?

It certainly seems like it is less expensive to do all three than it apparently costs to advertise for the drugs themselves.

[pmjoe]

The problem in the software industry (at least in the US) today is that it is far too easy to patent a vague idea. "Back in the old days", you had to provide the patent office a model of the implementation of your patent. When I worked with a top R&D IT group, they flat out told me that you couldn't patent ideas, but primarily implementations of those ideas. Unfortunately, that doesn't keep plenty of people from going out and patenting their vague ideas.

The other problem stems form the medium itself. Computers are designed to implement algorithms and present complex user interfaces. Just because I reproduce some obvious or existing algorithm or workflow on a computer (or specific hardware), it shouldn't produce a patent. For better or worse, the burden of getting a software patent should be on the ones applying for the patent requiring proof of the engineering and/or research behind the patent being applied for (not just that nobody has done it before, but why it is different or better and the process behind that). Also, most of these software patents shouldn't last for more than a few years. As it is right now, hobbyist programmers have to fear developing an application that might become too popular lest they might get sued over some obscure software patent that seemed like obvious code to the developer at the time. The intent of patents was to encourage innovation, not stifle it.

Thank God these people didn't patent all the sorting algorithms and put some kind of DCMA around them. It'd be impossible to even teach software development to students.

[drakethegreat]

Damn your comments amaze me. More to the point with my comments, I'm gonna spare the never ending debate on patents in general and just make a couple small comments on this case.

Apple is being sued over a system where they allow users to download files to their HD using Apple's iTunes software.

Ok so maybe Apple has done a lot of litigation so that makes them guilty? I'm sorry but I know a lot of software they downloads files...

With the vague description this patent would apply to probably half the software applications that are use sockets... Which of course would be an invalid patent. We need more information to make an educated decision.

So if you think Apple is guilty based on this article then you obviously don't know shit about how patents truly work and are just out to screw Apple.

At the same time however Apple could easily be guilty but the media does everyone a disservice when they mention patent lawsuits without talking about what the patent in question really covers.

[Louzer]

Originally posted by pmjoe
It certainly seems like it is less expensive to do all three than it apparently costs to advertise for the drugs themselves.

That's completely the fault of the FDA. Drug advertising would be really, really cheap, and, as such, charge barely $10 for a whole months worth of any pill. But, no. The FDA says that if you advertise on one page, you have to stick in three more pages of fine print that no one reads. Or tack on another 30 seconds to commercial time to warn you about 4 hour erections or that diarrhea and watrery eyes are side effects in 3% of users, consult your doctor (who, by the way, you NEED to consult in order to get the prescription anyway, why not just let him tell you the side effects!).

See, so its not the patent system, or the drug companies. Its the freakin FDA.

And I don't understand why the have to spend all that money on testing. Especially since they hide the bad news, cover up problems, and just fudge the samplings and results to pass FDA approval anyway.

BTW, the farm-a-suit-i-cal companies already get
a) tax breaks from having their production done in peurto rico
b) ability to write off testing and R&D costs
c) allowed to charge exorbidant prices without interference
d) lobby congress to get patent coverage pushed for certain patents so they can keep the cash cow for another 5 years

Hell, do you really think all their costs really rose the same amount of money that the government's new prescription drug plan covers? Its amazing.

[mark2005]

Everyone should visit http://playbacktime.com/2002/10/31/b...ing-snake-oil/ for Apple's perspective way back when. And visit http://www.streamingmedia.com/article.asp?id=9048&c=4 to see MS's real view of the matter before they were caught red-handed deleting and hiding emails of their business with Burst.

Note also that most analysts (including Cringely for what that's worth) and the stock market thought Burst should've gotten closer to a billion dollars in MS lifetime licensing fees if the patents were truly valid; Burst stock dropped over 50% when MS settled for $60 million. I think MS settled because of the emails, not patent validity.

As for the comment on countersuing, Apple had moved to invalidate the patents. Obviously, Burst had contacted Apple last year about paying a fee and threatening to sue, so Apple basically said get lost and took the initiative to wipe out these patents.

[pmjoe]

Originally posted by Louzer
That's completely the fault of the FDA. Drug advertising would be really, really cheap, and, as such, charge barely $10 for a whole months worth of any pill. But, no. The FDA says that if you advertise on one page, you have to stick in three more pages of fine print that no one reads. Or tack on another 30 seconds to commercial time to warn you about 4 hour erections or that diarrhea and watrery eyes are side effects in 3% of users, consult your doctor (who, by the way, you NEED to consult in order to get the prescription anyway, why not just let him tell you the side effects!).

Well, getting way off topic here, but if it were up to me, it would be illegal to advertise prescription drugs outside of medical trade media. That would completely resolve the issue.

[Tag Me Back]

Originally posted by pmjoe
Well, getting way off topic here, but if it were up to me, it would be illegal to advertise prescription drugs outside of medical trade media. That would completely resolve the issue.

But seriously, if you do have an erection lasting four hours or longer, see a doctor to prevent perminant damage...

[Bergermeister]

Originally posted by Tag Me Back
But seriously, if you do have an erection lasting four hours or longer, see a doctor to prevent perminant damage...

To me or my wife?

Back to the topic at hand... notice the mainstream media did not report Apple suing Burst, but rather Burst suing Apple.

Why doesn't Apple just buy Burst and put an end to all this?