E-Data Settles Patent Violation With Apple Over iTunes [UPDATED]
TMO Reports - E-Data Settles Patent Violation With Apple Over iTunes [UPDATED]
by , 5:30 PM EDT, August 4th, 2004
E-Data Corporation announced a patent-violation settlement with Apple today. The European patent, covers a "specific system and method of distributing digital content over electronic and wireless networks," according to E-Data, a patent holding firm whose business model is centered around licensing its patent portfolios.
The patent, EP 0 195 098 B-1, expired in January of 2003 in the US, but is still active in Europe. According to E-Data's press release, Apple's iTunes software ran afoul of the patent, dubbed "The Freeny patent," in that it covers concepts such as burning music to a CD or other tangible objects, or downloading music and transferring it to the same kinds of objects.
"The Freeny patent covers the downloading and recording of information, such as music, from a computer onto a tangible object, such as CDs, DVDs and MP3 players," says the company's press release. "The iTunes platform enables Apple Computer customers to download individual music tracks for a fee using the company's iTunes Music Store."
The iTunes Music Store (iTMS) was launched in the US in April of 2003, three months after the patent expired in US. Apple launched the European version of the iTMS in June of this year, where the patent is still valid. iTunes itself, also mentioned in the press release, was first released in January of 2001.
E-Data declined to offer any clarifications concerning the settlement and the violations Apple of which Apple had been accused.
Ongoing litigation
With these victories under its belt, E-Data is using its settlement with Apple to help launch litigation against other companies.
"This settlement with Apple marks another important milestone, as we aggressively pursue companies that are infringing upon our intellectual property," E-Data chairman Bert Brodsky said in a statement. "This license agreement, combined with recent settlements with Microsoft, Tiscali, HMV, On Demand Distribution, and Satellite Newspapers, further reinforces the validity of our patents. Given our continued success, we have identified additional companies that are infringing upon our intellectual property, both in the US and abroad, and will seek the necessary legal actions to ensure that our rights are enforced worldwide."
In a separate announcement today, E-Data listed 14 other companies it was suing. Those companies are: Cinemark USA, Inc.; Regal Entertainment Group; the Thomson Corporation; International Data Group, Inc.; Amazon.com, Inc.; Movietickets.com, Inc.; Ticketmaster, L.L.C., Marcus Theaters Corporation, Fandango, Inc., Franklin Electronic Publishers, Inc., The New York Times Company; Hallmark Cards, Inc.; American Greetings Corporation; and NewsBank, Inc.
E-Data did not reveal terms of its settlement with Apple. Apple spokespersons were not available for comment at press time.
[Update: E-Data employees declined to comment for the article, citing confidentiality agreements with Apple. Apple has also not responded to requests for comment. A spokesperson for E-Data's PR firm did note that E-Data's patent had expired in US, but was still active in Europe. The article has been updated accordingly. - Editor]
Observer Comments
Wed Aug 04, 2004 12:43 pm Subject: It sounds like E-Data wants to take on the world
Wed Aug 04, 2004 12:52 pm Subject: Clobberin' Time at the Patent Office
Wed Aug 04, 2004 1:13 pm Subject: Am I reading that right?
I think John may be right... What is innovative about transferring files and burning data to a CD that makes E-Data have the patent? I'm sure the folks who invented TCP/IP protocol might have somethig to say about transferring files, and we've been writing information to media ever since Edision first recited "Mary Had A Little Lamb" onto a wax cylinder!
Maybe there is a patent lawyer among us who can check the patent and figure out exactly what Apple just paid for...cuz it sounds almost as generic as Amazon's b.s. patent for "One Click" to me. (Which Apple also cowed under to.) Next thing you know someone will patent "a method for moving gas particles from outside a body to its inner recepticles" and we'll all get sued for breathing.
EDIT: I even took a quick look (but I gotta get back to work 
) at the Freeny patent info at E-Data's website. It's on their front page in their menu, it's so important to them. As far as I can tell it describes a reproduction device at the point of sale. It was written back in 1983 and seems to be describing going to what amounts to a vending machine and having it produce a record album (remember vinyl?) for you from choices made. The courts, if they were involved here, really extrapolated this one out to its edges.
Real patent lawyers will be helpful, though. I'm curious to know why this was settled rather than fought...
It's interesting that terms were not disclosed. Apple probably paid them less than the attorney fees required to litigate it all the way through. The owner of edata is probably the attorney as well. So he only needs to make a little bit to keep himself going and has no other outside expenses. Notice the stock trades on the pinksheets and no financial data is disclosed at all.
He has lost quite a few of the lawsuits he filed against other companies but he never discloses that either. Google it and you will find a few court papers on the matter. It's a non-issue really and nothing more than a one man company looking to pump and dump a pinksheet stock.
Wed Aug 04, 2004 3:35 pm Subject: Re: Am I reading that right?
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