Apple Faces Suit Over iPod-iTunes Link

[Grateful11]

It never ends.

Dec 29, 9:36 PM (ET)

NEW YORK (AP) - As if its options woes weren't trouble enough, Apple Computer Inc.
(AAPL) (AAPL) said Friday it is facing several federal lawsuits, including one alleging the
company created an illegal monopoly by tying iTunes music and video sales to its
market-leading iPod portable players.

The case, filed July 21, is over Apple's use of a copy-protection system that generally
prevents iTunes music and video from playing on rival players. Likewise, songs
purchased elsewhere aren't easily playable on iPods.

The plaintiff is seeking unspecified damages and other relief. The court denied Apple's
motion to dismiss the complaint on Dec. 20.

Another lawsuit, filed Nov. 7, alleges that the logic board of Apple's iBook G4 fails at an
abnormally high rate. The plaintiff is seeking unspecified damages. In a filing with the
Securities and Exchange Commission, Apple said its response to the complaint is not yet
due.

The Cupertino, Calif.-based company also disclosed that PhatRat Technology LLC filed
a lawsuit Oct. 24 alleging patent infringement. The Nike-iPod product in question,
developed jointly with Nike Inc. (NKE), allow runners to keep track of how far and how
fast they've gone. The company's response to the complaint is not yet due.

Separately, Apple is facing a securities lawsuit accusing the company and some of its
current and former officers of improperly backdating stock-option grants, failing to
properly account for them and making false financial statements. Defendants responses
to the complaint are not yet due.

The lawsuits, many of which seek class-action status, were disclosed in Apple's delayed
regulatory filing with the SEC.

The company cleared Chief Executive Steve Jobs and the rest of its current management
of misconduct involving the stock-option practice, despite Jobs' awareness of favorable
grant dates. The company restated past earnings Friday as a result of its three-month
probe.

Apple shares rose about 4.9 percent to close at $84.84 Friday on the Nasdaq Stock
Market following the announcement.

[anonymouse1]

No big deal. These happen all the time to big companies.

[Grateful11]

I'm just thinking of the irony of it. Everyone wanted digital portable music, that didn't skip
around like CD's, and a place to download legally. Then when we get it someone else
wants to slam the door shut.

[vision63]

And Apple without a lawyer.

[Carnos Jax]

I just don't get it...how in the world can Apple be sued when both products (iTunes and the iPod) were created by them? The competition seems to be a bunch of cry babies!

[vision63]

I'd probably sue 'em too if I had a company called PhatRat. Apple might want to settle and I'd be over like a ...

[GGD]

"Likewise, songs purchased elsewhere aren't easily playable on iPods."

My entire music collection is from purchased audio CDs dating back over 20 years, all easily playable on iPods (once you rip them). Aren't CDs the largest "elsewhere" source of music?

Apple's position seems to be that the Audio CD is the universal interchange format for music, and purchased music can be exported (burned) as Audio CDs and iTunes can import Audio CDs. If other sellers of digital music don't allow their songs to be converted to Audio CDs then it seems like the problem is on their end, not Apple's.

[samintx]

Posted yesterday earlier......

[mikebw]

dumb. You can convert any of the songs purchased from the iTunes music store to a format that can be played on any CD or mp3 player. iTunes software is required to load music onto your iPod, but it's free and is available for multiple OS's. You can load any of your own songs onto your iPod, except for certain files purchased from other DRM music services that don't seem to have workarounds.