Apple, Starbucks sued over custom music gift cards
A Utah couple acting as their own attorneys have filed a lawsuit against Apple and Starbucks over the retailers' recent "Song of the Day" promotion, which offers Starbucks customers a iTunes gift card for a complimentary, pre-selected song download.
In a seven-page formal complaint, James and Marguerite Driessen of Lindon, Utah say they developed in 2000 (and successfully patented in February 2006) a utility dubbed RPOS, or retail point of sale, for Internet merchandising. The concept, which forms the heart of the infringement lawsuit, would allow gift cards for pre-defined items that can be sold at a brick-and-mortar store but used online; customers could redeem a card for a dining room set or a DVD, for example.
But while the patent was under review, Apple had developed its own similar concept for iTunes Custom Cards. Unlike its past general-purpose gift cards for the iTunes Store, the Cupertino, Calif.-based company's then-new cards allowed shoppers to buy a card for a specific artist's album or song, complete with custom artwork.
This apparently direct comparison led to legal pressure from the Driessens, who asked Apple to license the patent once it had been granted -- only to learn after discussions that Apple had simply pulled the iTunes cards from stores in the US, leaving the products on UK shelves alone and the Driessens without the possibility of a licensing deal.
An illustration of the Driessens' patent on gift cards.
To the plaintiffs' surprise, however, Apple appears to have simply resurrected the American version of the concept under a different name more than a year later, in November 2007. Called a Digital Release Album, the card was once again tied to a specific iTunes song or complete record.
An iTunes Digital Release, from 2007 (top); iTunes Custom Cards, from 2005 (bottom).
In releasing these cards, the Driessens say, Apple is simply hoping to skip royalties by implying that customers can claim songs with a notebook computer, iPhone, or iPod using the iTunes Wi-Fi Music Store at a local Starbucks coffee shop, bypassing the need to return home. Though superficially different, this is just an infringement of the patent under a new name, the lawyers argue.
Starbucks is said to be a complicit partner in the infringement as a willing distributor, selling the cards across the US and holding its "Song of the Day" promotion to encourage purchases of the allegedly infringing iTunes cards.
Apple has not publicly responded to the charges made in the lawsuit, which would bring the complaint to a jury trial and ask for triple the normal damage compensation as well as issue a permanent injunction barring both Apple and Starbucks from selling the offending cards. However, it's notable that Apple's Starbucks and WI-Fi Store sites aren't believed to have referenced the cards, and in current form only spur customers to buy directly from iTunes itself.
Separately this week, Apple was also subject to another suit with seemingly fewer merits, this time manifesting itself in the form of a four-page complaint by John Martin of Rockford, Illinois.
The plaintiff in this second lawsuit accuses the iPhone maker of infringing on a patent for controlling an electronic game system with a finger-release touchscreen serving as the control mechanism. In selling one or more similar products -- which are unnamed in the document but may include the iPhone and iPod touch -- Apple is knowingly drawing on at least some of the patent for its own unlawful gain, Martin's representing law firm says.
As with the Driessen suit, this new case would block Apple from selling any of the alleged infringing products and would look for both royalties as well as "enhanced damages" to compensate for the perceived losses.
In a seven-page formal complaint, James and Marguerite Driessen of Lindon, Utah say they developed in 2000 (and successfully patented in February 2006) a utility dubbed RPOS, or retail point of sale, for Internet merchandising. The concept, which forms the heart of the infringement lawsuit, would allow gift cards for pre-defined items that can be sold at a brick-and-mortar store but used online; customers could redeem a card for a dining room set or a DVD, for example.
But while the patent was under review, Apple had developed its own similar concept for iTunes Custom Cards. Unlike its past general-purpose gift cards for the iTunes Store, the Cupertino, Calif.-based company's then-new cards allowed shoppers to buy a card for a specific artist's album or song, complete with custom artwork.
This apparently direct comparison led to legal pressure from the Driessens, who asked Apple to license the patent once it had been granted -- only to learn after discussions that Apple had simply pulled the iTunes cards from stores in the US, leaving the products on UK shelves alone and the Driessens without the possibility of a licensing deal.
An illustration of the Driessens' patent on gift cards.
To the plaintiffs' surprise, however, Apple appears to have simply resurrected the American version of the concept under a different name more than a year later, in November 2007. Called a Digital Release Album, the card was once again tied to a specific iTunes song or complete record.
An iTunes Digital Release, from 2007 (top); iTunes Custom Cards, from 2005 (bottom).
In releasing these cards, the Driessens say, Apple is simply hoping to skip royalties by implying that customers can claim songs with a notebook computer, iPhone, or iPod using the iTunes Wi-Fi Music Store at a local Starbucks coffee shop, bypassing the need to return home. Though superficially different, this is just an infringement of the patent under a new name, the lawyers argue.
Starbucks is said to be a complicit partner in the infringement as a willing distributor, selling the cards across the US and holding its "Song of the Day" promotion to encourage purchases of the allegedly infringing iTunes cards.
Apple has not publicly responded to the charges made in the lawsuit, which would bring the complaint to a jury trial and ask for triple the normal damage compensation as well as issue a permanent injunction barring both Apple and Starbucks from selling the offending cards. However, it's notable that Apple's Starbucks and WI-Fi Store sites aren't believed to have referenced the cards, and in current form only spur customers to buy directly from iTunes itself.
Separately this week, Apple was also subject to another suit with seemingly fewer merits, this time manifesting itself in the form of a four-page complaint by John Martin of Rockford, Illinois.
The plaintiff in this second lawsuit accuses the iPhone maker of infringing on a patent for controlling an electronic game system with a finger-release touchscreen serving as the control mechanism. In selling one or more similar products -- which are unnamed in the document but may include the iPhone and iPod touch -- Apple is knowingly drawing on at least some of the patent for its own unlawful gain, Martin's representing law firm says.
As with the Driessen suit, this new case would block Apple from selling any of the alleged infringing products and would look for both royalties as well as "enhanced damages" to compensate for the perceived losses.
Comments
The plaintiff in this second lawsuit accuses the iPhone maker of infringing on a patent for controlling an electronic game system with a finger-release touchscreen serving as the control mechanism. In selling one or more similar products -- which are unnamed in the document but may include the iPhone and iPod touch -- Apple is knowingly drawing on at least some of the patent for its own unlawful gain, Martin's representing law firm says.
[ View this article at AppleInsider.com ]
They haven't made any games for it!
That has no merit
They haven't made any games for it!
That has no merit
We mentioned that it lacked merit =P
Best,
K
We mentioned that it lacked merit =P
Best,
K
Lacked?!?!
It and merit shouldn't be in the same sentence!
They haven't made any games for it!
That has no merit
Hmm, it has been called a game-changing device... given the incredible amount of human sense in patent laws, this might suffice
A caste developing terms like "enhanced damages" is of no value to mankind.
Seriously America, sort your patent system out because it's screwed big time.
Oh and by the way I'm going to patent the idea of taking out a class action lawsuit on stupid money hungry gits with the intelligence that make a blade of grass proud not to be them but because I'm a nice guy I'll allow people to use it royalty free.
The Driessens' patent isn't about a gift card for a specific product. I mean, there must be hundreds of examples from before their application in 2000. So the patent is for something else. I guess that would be the model of a retail store making a deal to sell someone else's web content with a gift card. Apple isn't doing that.
I'd guess that this is a direct outcome of the new deals with the movie studios for rentals. Apple wants to sell movie gift cards in the retail Apple Stores -- the card gives you access to the movie rental, with an option to buy. Something like that. The potential for this is much greater for movies than music, IMHO.
Thanking you in advance...
The US is out of control in regards to patent law as it does seem that you can patent just about any insane idea that pops into your head, never do anything with it, wait until somebody else actually achieves something with it and then make money off of their efforts.
Guess that is the new Amerikan dream...
I would think not; but still, like I said, at least this one shows a small amount of legitimacy to it.
This is a good example of how issuing patents has gotten out of control. There is nothing substantially innovative about the the business model.
...holding my breath... -
AGREED! There should be some law that says you patent it, YOU make something out of it.
This 'having an idea', getting it patented and expecting Royalties from another that takes the chance of utilizing some form of a patented idea and makes a product that becomes hugely successful needs to be rethought.
I'm not against some small form of compensation but if one uses a patented idea in a product they utilize and it becomes a marketing flop and plumetting sales cause the loss of major bucks invested, does that mean the reverse can happen and can Apple legally go after all these smaller patent holders that might have been used in some form and can Apple ask of them for compensation for their loss? I know I am being absurd, but no more than the most recent suits filed against Apple!
Like the link below of an article regarding a 23 year old coming up with an idea of a "boom Box" speakers for the iPhone / iPod touch. He has an idea that results in an actual product, a more professional diagram and he is looking for a manufacturer to produce his idea that he is already marketing. He is taking a huge chance with his product that is based on the eco system that is iPhone. I wish him luck in his endeavour and hope it turns out for him as well as it has for the creator of DLO and it's products.
http://www.iphonealley.com/news/live...sed-for-iphone
The Driessens didn't even bother to produce actual gift cards to "sell" to Apple / Starbucks.
This is a good example of how issuing patents has gotten out of control. There is nothing substantially innovative about the the business model.
Having read over the patent in question, I am simply appalled that it was granted in the first place.
http://www.freepatentsonline.com/7003500.html
The Driessens didn't even bother to produce actual gift cards to "sell" to Apple / Starbucks.
They don't have to. Presuming the patent is valid (and now that it has been approved, we must do so, unless and until it is proven otherwise), they don't have to sell any physical thing - all they have to do is decide on a case-by-case basis, whether or not they are willing to sell a license to others (like Apple/Starbucks) for permission to use their ideas.
It is interesting to note that, in this case, they seem to have tried to actively protect their patent right from the outset, by contacting Apple back in 2005 when the first rumblings of the new service were coming out. Apple backed down initially, and then decided to go ahead with it anyway.
I have more respect for these patent holders than I do for some others, who seem to delight in waiting for a product to become highly entrenched before coming out of the blue with no prior notice, and trying to muscle into the action.
However, once again I repeat that I am shocked and disappointed that they weren't laughed out of the Patent Office on day one of their application for this particular idea.
This is ridiculous.
There have been gift certificates of various types for years.
Yeah, even BEFORE personal computers and Apple and the internet and iTunes and Starbucks or even this parasitic pair.
please.
i wish i'd patented buying a cup of coffee from a human with a piece of green paper.
seems about as viable.
Did these people invent gift cards? no.
Did these people invent gift cards that can be redeemed online? no.
Did these people invent the internet? no.
Did these people invent e-commerce? no.
Did these people create or design any specific technology? no.
The fact that the US Patent Office issued a patent solely based on the concept of a method of commerce without any unique technology that these people created is insane. What is really insane how the patent can be applied to such diverse purchases as a dining room set or a DVD.
What would happen if you went into a store and bought a gift card used to pay online your flat rate phone service bill? These people patented it.
What would happen if you went into a store and bought a gift card for a large pizza that you can go to Pizzashack.com and order your pizza for delivery and use the gift card as payment... oh, cant do that,,, it violates their patent.
Another example of people that are leeches on society. Oh, thats right they seem to be lawyers.
I'm not an attorney, and I don't play one on TV, but I cannot believe it's possible to patent such a general idea - I thought it need to be a specific process or method to could be patented, and even a slight but material variation to the process would avoid an infringement.
These people suck.