Legal

Latest

  • Apple to shell out more cash in new anti-poaching settlement offer

    by 
    Mike Wehner
    Mike Wehner
    01.14.2015

    Apple, Google, Adobe and Intel have tossed a few extra bucks into the settlement pot in order to satisfy the terms of anti-poaching lawsuit that first got off the ground in 2013. The suit alleges that top tech companies, including Apple, lured employees away from certain companies while agreeing to keep their hands off of each other's personnel. An earlier offer of $324 million was rejected, and the new offer reportedly tops $415 million. The new amount will satisfy the demands of the plaintiffs but still requires the stamp approval from US District Judge Lucy H. Koh, who has been in charge of the case from the start. It's not clear how much each of the defendant companies stand to lose in the settlement, as the dollar amounts aren't broken down in any way.

  • Blizzard's Overwatch bumps into trademark issues

    by 
    Eliot Lefebvre
    Eliot Lefebvre
    01.12.2015

    Remember when no one knew what Overwatch was and we were all speculating it was some sort of expansion based on the fact that the trademark had been filed? Oh, it was a more innocent time. Unfortunately for that trademark, it might be having a little bit of a problem after all, as it has come to light that another company filed an earlier claim for the trademark that would supersede Blizzard's use of the name due to likelihood of confusion. The trademark that has already been filed is for an app that can be used to provide enhanced functionality for paintball matches, laser tag matches, and the like. Both trademark applications are currently suspended pending investigations, so it remains to be seen whether Blizzard will be pushing forward or will change the name of the game to something legally different. Like Oversupervise, for instance.

  • Judge dismisses lawsuit alleging Apple knowingly released MacBook Pros with faulty logic boards

    by 
    Yoni Heisler
    Yoni Heisler
    01.09.2015

    With class action suits against Apple seemingly initiated every few weeks, it's easy to keep track of what's happening where. That said, you might recall a suit recently levied against Apple alleging that the company purposefully sold MacBook Pros circa 2010/2011 that it knew contained faulty logic boards. Now Reuters is reporting that U.S. District Judge William Alsup recently dismissed the case, noting that the plaintiffs did not meet their duty of showing that Apple's advertising materials -- wherein they called the MacBook Pro "state of the art" -- misrepresented the quality of the notebooks. "Plaintiffs have failed to allege that Apple's logic boards were unfit for their ordinary purposes or lacked a minimal level of quality," Alsup wrote. "Both plaintiffs were able to adequately use their computers for approximately 18 months and two years, respectively." Note that this case is different from a 2011 class action filed against Apple alleging that 2011-era MacBook Pros came with faulty GPUs which required out of pocket repair costs of upwards of US$600.

  • Lizard Squad hacker arrested for cyber-fraud

    by 
    Justin Olivetti
    Justin Olivetti
    01.05.2015

    A form of justice may have come to bear on one of the members of Lizard Squad. Today, police in Britain have arrested 22-year-old Vinnie Omari, who has connections to the hacker group, for alleged cyber-fraud. The arrest is unrelated to some of the recent activities of Lizard Squad, which includes shutting down the PlayStation Network and Xbox Live over Christmas, DDoS attacks on Destiny this past September, and a bomb threat made on a plane carrying SOE President John Smedley last August. Omari was sought in connection to PayPal thefts from 2013 to 2014.

  • Judge dismisses Apple employee lawsuit demanding compensation for time spent in security checks

    by 
    Yoni Heisler
    Yoni Heisler
    01.02.2015

    In July of 2013, Apple was hit with a lawsuit from retail employees alleging that they were not being compensated for time spent taking part in security checkouts. As an illustrative example, imagine an employee decides to break for lunch at noon. Before doing so, said employee must undergo a security and bag check to ensure that no items are being whisked out of the store. Consequently, an employee who is off the clock at noon may not be able to leave the store until, say, 12:15. The lawsuit sought backpay for affected employees and a change to Apple's protocol whereby employees would be compensated for time spent during security checks. Now comes word via AppleInsider that the case was dismissed about one week ago on account of a similar case recently presented before the U.S. Supreme Court. That case, INTEGRITY STAFFING SOLUTIONS, INC. v. BUSK, centered on temp workers at Amazon who were not compensated for time spent going through security screenings at the end of their shifts. In that suit, workers at Amazon claimed that the security process could sometimes delay their departure by upwards of 30 minutes. In a unanimous 9-0 decision handed down in early December, the Supreme Court ruled against the employees, pointing out that employers only need to pay employees for activities that encompass an "integral and indispensable part of the principal activities for which covered workmen are employed." For example, Justice Clarence Thomas referenced a case where employees at a battery plant were owed compensation for the time spent showering and changing clothes after a shift because removing clothes with toxic chemicals formed an "indispensable part" of their job. Similarly, Thomas noted how employees at a meatpacking plant are owed compensation for time spent sharpening dull knives. With respect to Amazon, the Court ruled that security checks before departure are too far removed from the core job responsibilities of Amazon warehouse employees to warrant compensation. The ruling reads in part: The security screenings at issue here are noncompensable postliminary activities. To begin with, the screenings were not the "principal activity or activities which [the] employee is employed to perform." 29 U. S. C. §254(a)(1). Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products for shipment to Amazon customers. The security screenings also were not "integral and indispensable" to the employees' duties as warehouse workers. As explained above, an activity is not integral and indispensable to an employee's principal activities unless it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform those activities. The screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. And Integrity Staffing could have eliminated the screenings altogether without impairing the employees' ability to complete their work. With that precedent fresh on the books, the lawsuit against Apple was summarily dismissed by U.S. District Court Judge William Alsop.

  • The most exciting Apple legal story you'll read all day

    by 
    Mike Wehner
    Mike Wehner
    12.23.2014

    In a move that is sure to send massive shockwaves through Apple Store break rooms the world over, two former Apple Store employees are throwing in the towel on their claims against the company. The duo alleges that Apple owed them some cold hard cash after they spent as long as 25 minutes waiting for their bags to be checked before departing on breaks from their Apple Store shifts. The checking of employee bags, backpacks, and any other pouch that could potentially be used to smuggle delicious iDevices and other Apple swag out of the store is a common practice, though having to wait nearly a half hour for such an inspection certainly does seem a bit out of the ordinary. We all know that feeling of leaving work after a long day, so we can certainly sympathize. The Supreme Court, on the other hand, didn't see things the same way. The court decided that the unfortunate delays weren't worthy of compensation, and tossed the case like a week-old newspaper. Plaintiffs Deal Pelle and Amanda Frlekin have declared that they won't fight the federal motion to dismiss the suit, but will continue to pursue a ruling at the state level. Apple filed its own brief on the matter, claiming that since no work is actually being done while an employee is waiting for a bag to be checked, no compensation is warranted. The company also requested that the state-level claims be dismissed.

  • Read the fine print: Ubisoft free game offer waives lawsuits

    by 
    Earnest Cavalli
    Earnest Cavalli
    12.22.2014

    Ubisoft's offer of a free game to make up for the widespread technological problems of Assassin's Creed: Unity seems generous, but those hoping to take advantage should be aware of a notable caveat tucked inside the offer's fine print. You'll find the entirety of the relevant legalese beyond the break, but in short it states that by downloading the free game, players are waiving the right to sue Ubisoft or any of its development studios over the state of Assassin's Creed: Unity. This precludes players from suing Ubisoft directly, as well as joining any class-action lawsuits against the publisher.

  • Judge denies request to release video of Steve Jobs deposition

    by 
    Yoni Heisler
    Yoni Heisler
    12.18.2014

    Just one day after Apple emerged victorious in its iPod antitrust lawsuit, Judge Yvonne Gonzalez Rogers ruled that there was no overwhelming "public interest" in releasing videotaped deposition testimony of Steve Jobs taken a few months before his passing. Earlier in the month, a trio of news organizations -- Bloomberg, CNN, and the AP -- filed suit seeking to have video of the deposition released. Apple naturally opposed the motion, arguing that it amounted to nothing more than exploiting a dead man for no beneficial reason whatsoever. Rogers' reasoning reads in part: The Court is mindful of the public interest in the video testimony at issue and in the importance of the presumption of public access to judicial records. The Court also recognizes the public policy concern raised by defendant, namely that if releases of video depositions routinely occurred, witnesses might be reticent to submit voluntarily to video depositions in the future, knowing they might one day be publicly broadcast. If cameras in courtrooms were not currently prohibited, the argument might have less weight. However, given the lack of authority approving such a release, the concern is well-taken that under the current rules, deponents have no expectation or notice that the videos will be disseminated beyond the presentation during trial. If the video had been introduced as a trial exhibit, or if no objection had been lodged, the ruling on this motion might be different. In light of the present circumstances and the lack of legal authority justifying the Media Intervenors' request, however, the Court will not authorize the copying of the Jobs Deposition. The ruling in its entirety can be read below, courtesy of Apple Insider. Ruling Denying Media Intervenors Access to Jobs Deposition by Mikey Campbell

  • Apple emerges victorious in iPod antitrust lawsuit

    by 
    Yoni Heisler
    Yoni Heisler
    12.16.2014

    Less than 24 hours after closing arguments were presented in Apple's iPod antitrust lawsuit, a jury ruled that Apple did not violate any antitrust laws when it took proactive measures to prevent songs downloaded from competing music services from being playable on the iPod. The jury's verdict brings an end to a trial that has been nearly 10 years in the making. The Verge adds: Delivering a unanimous verdict today, the group said Apple's iTunes 7.0, released in the fall of 2006, was a "genuine product improvement," meaning that new features (though importantly increased security) were good for consumers. Plaintiffs in the case unsuccessfully argued that those features not only thwarted competition, but also made Apple's products less useful since customers could not as easily use purchased music or jukebox software from other companies with the iPod. Throughout the trial, Apple emphasized that its efforts to keep the iPod locked down were to preserve a seamless user experience. Interestingly enough, Eddy Cue testified at trial that Apple at one point considered licensing its FairPlay DRM to competitors before ultimately determining that they "couldn't find a way to do that and have it work reliably." Apple at trial also emphasized that implementing DRM was done at the behest of record labels who reserved the right to remove their music from iTunes if someone figured out a way to circumvent it. "There are lots of hackers trying to hack into these things so that they can do things that would put us in noncompliance with the contracts we have with the music companies," Steve Jobs explained in a videotaped deposition from 2011. "We were very scared of that." Further, and as we highlighted earlier today, the iTunes 7 update at the center of the litigation introduced a slew of usability improvements across the board, thus diminishing the claim that iTunes 7 was primarily designed to thwart competing music services. With this trial now concluded, Apple can rest easy knowing that it won't have to fork over what could have been over $1 billion in damages. Though plaintiffs were suing for $350 million, a ruling that Apple willfully violated antitrust law could have potentially seen that figure tripled.

  • Apple's iPod antitrust lawsuit hinges on iTunes 7

    by 
    Yoni Heisler
    Yoni Heisler
    12.16.2014

    Apple's iPod antitrust lawsuit wrapped up on Monday afternoon, capping off a week-long trial that has been close to 10 years in the making. Now, the case has been handed off to a jury that will deliberate whether or not Apple chose to keep its iTunes/iPod ecosystem closed off for anti-competitive reasons or if it was done for security reasons. If there's been one recurring theme from Apple throughout the entirety of the trial, it's that keeping competing music services off of the iPod was more about security than anything else. In fact, Steve Jobs, during a videotaped deposition conducted in 2011, said that record companies reserved the right to immediately remove all of their music from iTunes if someone figured out a way to circumvent Apple's FairPlay DRM. Ars Technica adds: The jury will make an unusual split decision, deliberating first over the narrow issue of whether iTunes 7.0 was a true product improvement or an anti-competitive scheme to kick out Apple competitor RealNetworks. If the jury sees the "software and firmware updates" in iTunes 7.0 as a real improvement, the case will be over-a win for Apple. If it doesn't see it that way, the jurors will still have to decide if Apple broke competition laws and, if so, how much the company should pay in damages. Plaintiffs are asking for $351 million, and any award will be tripled under antitrust law. It's an interesting case for the jury to decide because the "damage" Apple was so fearful of is purely theoretical. Because Apple was so vigilant about locking down the iPod, Apple can't really point to any examples which illustrate how a wide open iPod would adversely affect the user experience. As for iTunes 7, the software update at the heart of this legal battle, well, we covered all of its improvements all the way back in 2006. Album & Cover Flow views - you can now view your library by album art covers, or use a snazzy 3D 'cover flow' (you mean, like CoverFlow?) to really show off New Source organization - each media type gets its own library and source, offering much easier access and organization Gapless playback - MP3, AAC and Apple Lossless files that are one cohesive album can now sound like one 640 x 480 video resolution for TV and - as everyone predicted - movie downloads from the likes of Disney, Pixar, Touchstone, Miramax. Movies adopt the same usage rights as TV shows (i.e. - no burning) Integrated iPod management - you can adjust what media is synced to your iPod from within iTunes, instead of having to clunk around in the preferences. We haven't seen what this looks like yet, but it sounds like a much better idea for obvious reasons Transfer purchases via iPod Those seem like rather substantive upgrades to me.

  • As Apple's e-book antitrust appeals process begins, one judge already questioning Judge Cote's ruling

    by 
    Yoni Heisler
    Yoni Heisler
    12.16.2014

    Apple's effort to appeal the adverse judgement handed down by Judge Denise Cote began yesterday before a three-judge panel. As a quick recap, Cote, back in July of 2013, ruled that Apple illegally colluded with book publishers to artificially inflate the price of e-books across the industry. From the get go, some believed that Cote exhibited an obvious anti-Apple bias. Others, meanwhile, found it odd that the U.S. Government was going after Apple so tenaciously in the first place given Amazon's ongoing dominance in the e-book market. With the appeals case now underway, AFP reports that one judge in particular -- Judge Dennis Jacobs --- is already casting doubt on wisdom behind Cote's ruling. "What we're talking about is a new entrant who is breaking the hold of a market by a monopolist who is maintaining its hold by what is arguably predatory pricing," Jacobs said. Jacobs also took a swipe at the government's characterization of the conspiracy among the publishers, suggesting that prosecutors should have shown more leniency in light of Amazon's dominance, which has pushed conventional booksellers like Barnes & Noble close to bankruptcy. "All those people who got together, it's like the mice saying they want to put a bell on the cat," the judge said. Apple of course has always maintained that its entry into the e-book market may have temporarily raised the price of e-books in the short term but that prices eventually leveled out. Apple also maintains that its entry into the e-book market is, in fact, beneficial to all parties involved as it serves to increase competition in a decidedly one-sided market. If the appeals court overturns Cote's ruling, Apple will be off the hook. If they uphold it, Apple will have to fork over $450 million to affected users. Earlier this month, Apple executive Eddy Cue told Fortune that Apple chose to fight the DOJ instead of settling because "we feel we have to fight the truth." Is it a fact that certain book prices went up? Yes. If you want to convict us on that, then we're guilty. I knew some prices were going to go up, but hell, the whole world knew it, because that's what the publishers were saying: 'We want to get retailers to raise prices, and if we're not able to, we're not going to make the books available digitally.' At the same time, other prices went down too, because now there was competition in the market.

  • Former iTunes engineer testifies: iTunes updates were designed to "block 100% of non-iTunes clients"

    by 
    Yoni Heisler
    Yoni Heisler
    12.15.2014

    This past Friday, as part of Apple's ongoing iPod antitrust lawsuit, former Apple engineer Rod Schultz took the stand and testified about Apple's efforts to prevent the iPod from playing music files downloaded from from competing services. The Wall Street journal reports: A former iTunes engineer testified in a federal antitrust case against Apple Friday that he worked on a project "intended to block 100% of non-iTunes clients" and "keep out third-party players" that competed with Apple's iPod. Echoing arguments previously raised at trial from the likes of Eddy Cue and Steve Jobs, Schultz said that the security oriented iTunes updates Apple implemented in the mid-2000s were less about blocking competition and more about keeping the iPod/iTunes ecosystem safe, secure, and reliable. Apple many years ago caught a lot of flack over its FairPlay DRM, but testimony delivered during this trial suggests that Apple's behavior with iTunes had more to do with complying with stringent record label contracts than with anything else. As Jobs relayed via a videotaped deposition conducted in April of 2011, Apple's music contracts were "black and white" and stipulated that record labels could pull their music from iTunes in the event that someone was able to break Apple's DRM. "We were very concerned with somebody like Real [Networks] promising customers that they would have compatibility, when in the future they might not," Jobs explained. "That's not something we could guarantee. So we could get sued by all these people." Plaintiffs are seeking US$350 million in damages on the grounds that Apple illegally stifled competition so that they could, in turn, keep the price of iPods artificially high. The jury is expected to begin deliberating sometime this week.

  • Apple fires back hard at news organizations for demanding to see Steve Jobs depo video

    by 
    Yoni Heisler
    Yoni Heisler
    12.10.2014

    As anticipated, Apple has taken an extremely strong stance against a request from three news organizations to see the release of a videotaped deposition of Apple co-founder Steve Jobs. The deposition itself was conducted in April of 2011, a few months before Jobs passed. A motion from the news organizations involved in the request -- Bloomberg, CNN, and the AP -- argues that releasing the video is in the public interest given Jobs' position as a notable and recognizable figure of influence. Apple of course, which has a long history of being protective of Jobs' image and likeness, sees things much differently. Mincing no words, Apple lawyers categorized the request as exploitive while adding that it serves no necessary purpose. On Tuesday, reporters for The Verge were in attendance when Apple's lawyers presented their position before US district court judge Yvonne Gonzalez Rogers. Apple's lawyer Jonathan Sherman, a partner at law firm Boies, Schiller, and Flexner accused Burke and the media companies of being opportunistic during a hearing in Oakland's federal court building this evening. "The marginal value of seeing him again, in his black turtleneck - this time very sick - is small," Sherman said, contrasting that with high-profile appearances like Apple product releases, and when Jobs stumped for a new campus at a city council meeting in Cupertino. "What they they want is a dead man, and they want to show him to the rest of the world, because it's a judicial record." Burke replied by saying it was not a frivolous request, and calling the testimony "invaluable." Judge Rogers hasn't yet ruled on the issue and it'll be interesting to see where she lands on the matter.

  • Boston ice dancer selected as new plaintiff in iPod class action lawsuit

    by 
    Kelly Hodgkins
    Kelly Hodgkins
    12.10.2014

    A 65-year-old amateur ice dancer is the new plaintiff in the class action lawsuit filed against Apple, reports the Wall Street Journal. Barbara Bennet was flown into Oakland California and appeared in U.S. District Court on Tuesday. Following interviews with attorneys for both sides, Judge Yvonne Gonzalez Rogers said "We're on the right track." The class action suit accuses Apple of anticompetitive practices that blocked other music players from connecting with iTunes and prohibited rival music services from integrating with Apple's popular iPod players. These actions allegedly drove up the prices of the iPod players from 2006 to 2009. Plaintiffs are requesting up to $350 million in damages, which could be tripled in accordance with antitrust regulations. Court room proceedings in the suit started this week in the U.S. District Court of Northern California. The first week of the trial saw the departure of the two plaintiffs named in the suit for not owning an iPod covered by the case. With a replacement plaintiff in place, the trial will continue with a verdict possible as early as next week. This decision may not be the end of the lawsuit, though, as the changeover in plaintiffs provides Apple with an appealable issue in the case.

  • News organizations fight to have tape of Steve Jobs video deposition released to the public

    by 
    Yoni Heisler
    Yoni Heisler
    12.09.2014

    During Apple's ongoing iPod antitrust lawsuit, the plaintiffs introduced video testimony from Steve Jobs that was recorded in April 2011, a few months before his passing. Per Apple's request to the plaintiffs, Jobs' video footage has not been made public. Now comes word via CNET that a trio of news organizations -- CNN, Bloomberg, and the AP -- are petitioning to have Jobs' video deposition released to the public citing a "public interest" in the footage. "Given the substantial public interest in the rare posthumous appearance of Steve Jobs in this trial, there simply is no interest that justifies restricting the public's access to his video deposition," attorney Thomas Burke, who is representing all three media organizations, wrote in the filing Monday. Apple, meanwhile, plans to vehemently oppose the motion, though it remains unclear, at this point, what legal basis they'll put forth to keep the video free from the public eye. All told, Jobs' video testimony is about two hours long and mostly centers on Apple's contracts with record labels and the company's efforts to maintain strict control over the iPod/iTunes ecosystem. In one particularly interesting excerpt we highlighted earlier in the week, Jobs detailed many of the stipulations from record labels that accompanied Apple's iTunes Music Store contracts, one of which was that record labels reserved the right to remove their music from iTunes if they discovered anyone had hacked Apple's FairPlay DRM. The iPod lawsuit is expected to wrap up this week and, for the time being, is proceeding without a named plaintiff.

  • Uber ordered to cease operations in Spain

    by 
    Ben Gilbert
    Ben Gilbert
    12.09.2014

    Taxi drivers protest Uber in Spain, (AP Photo/Paul White) Uber can't keep itself out of the news lately. The San Francisco-based company best known for creating a mobile app that connects taxi/livery services with smartphone users is now banned from operation in Spain. The injunction is a result of a complaint from the Madrid Taxi Association, and it forces Uber to cease operations in the country immediately; a statement from the Madrid court announcing the injunction points out that Uber didn't even get to defend itself, and cites Uber's business license being from Delaware (a tax haven where many companies file, despite not being based there) as the reason. If all this sounds a bit like a kangaroo court, that's because it likely is: entrenched taxi and livery companies have been working against Uber and other ridesharing services in a variety of cities all over the world. Uber is of course far from perfect -- this is a company that was recently caught plotting against journalists, headed by a CEO that's been heavily criticized for misogyny -- but it wasn't even present to defend itself in the Spanish court hearing that ended its ability to function in Spain. Expect Uber to push back in the coming weeks; the company didn't respond to request for comment as of publishing.

  • Apple iPod class action trial to continue temporarily without a plaintiff

    by 
    Kelly Hodgkins
    Kelly Hodgkins
    12.09.2014

    Apple's iPod class action lawsuit will be allowed to continue without a plaintiff, reports the Associated Press. The suit took an unusual turn this week when all existing plaintiffs were disqualified for not owning an iPod covered by the suit. The last remaining plaintiff, Marianna Rosen, was dismissed on Monday with a firm scolding from Judge for not providing adequate information about her iPod purchases. With no remaining plaintiffs, Apple filed a motion for the dismissal of the suit, but that request was denied by presiding U.S. District Judge Yvonne Gonzalez Rogers. Saying she "has an obligation to millions of absent class members," Judge Rogers decided to allow the case to proceed temporarily without a plaintiff. Attorneys suing Apple have until Tuesday to find a new lead plaintiff who purchased an eligible iPod and was negatively impacted as alleged in the case. More than 8 million consumers purchased iPods during the 19-month period listed in the complaint so there is no shortage of potential replacements. Attorneys for the class action group claim they already have heard from several volunteers willing and ready to step in as the new lead plaintiff. For its part, Apple confirms it intends to investigate thoroughly the qualification status of any new plaintiff in the case.

  • Former Global Operations manager Paul Devine sentenced to one year in prison for selling Apple secrets

    by 
    Kelly Hodgkins
    Kelly Hodgkins
    12.08.2014

    Former Apple Global Operations manager Paul Devine was sentenced last week to one year in prison following his guilty plea on charges of money laundering, conspiracy and wire fraud. He also must repay $4.5 million for crimes against his employer Apple. In 2010, Devine was arrested and subsequently pleaded guilty to fraud, conspiracy and money laundering in a scheme that benefited Apple's Asian suppliers and manufacturers. From 2007 until 2010, Devine and partner Andrew Ang received lucrative kickbacks in exchange for confidential internal Apple information such as product specifications and pricing. This information allowed the suppliers to negotiate more favorable contracts with Apple. Devine will begin serving his sentence in February of 2015. An indictment against Ang in the US is still pending while Chua Kim Guan faces charges in his home country of Singapore.

  • In videotaped deposition, Steve Jobs talks DRM and dealing with record labels

    by 
    Yoni Heisler
    Yoni Heisler
    12.08.2014

    Six months before he passed away, Steve Jobs sat down for a videotaped deposition to answer questions connected to Apple's ongoing iPod antitrust class action lawsuit. The lawsuit alleges that Apple improperly enacted measures to render songs downloaded from competing music services unplayable on the iPod. In doing so, the plaintiffs allege that Apple was able to keep iPod pricing higher than it would have ordinarily been otherwise. This past Friday, video footage from Jobs' deposition was played before the court and CNET was there to recap some of the more interesting exchanges. Jobs' take on the matter aligns with what Eddy Cue articulated on the stand earlier last week, namely that the fear of piracy amongst record labels resulted in fairly strict contracts that required DRM to be an integral part of the iTunes/iPod ecosystem. According to Jobs, Apple's contracts with record labels were "black and white." Jobs explained that the contracts, in addition to stipulating that songs needed to be laden with DRM, specified that if Apple's DRM (called FairPlay) was broken or hacked, the record labels could immediately remove their music from iTunes. No questions asked. So when RealNetworks came around in 2004 and reverse engineered FairPlay, thereby enabling music purchased on the RealPlayer Music Store to work on the iPod, Apple took immediate notice and subsequent action. Jobs was also asked about the efforts of competing digital music stores like RealNetworks, a company that developed software called Harmony that would reverse engineer Apple's FairPlay to let iPod owners put RealNetworks' music on their devices. Through iTunes updates, Apple continuously broke Harmony, an action plaintiffs say was anticompetitive because it degraded the consumer experience and was an example of Apple wielding a monopolistic position in the market. Jobs response? Harmony was undermining Apple's end-to-end product ecosystem. "We were very concerned with somebody like Real [Networks] promising customers that they would have compatibility, when in the future they might not," he said. "That's not something we could guarantee. So we could get sued by all these people." Jobs' testimony paints a picture of stringent contracts with record labels that Apple was extremely vigilant about upholding, lest the crown jewel that was the iTunes Music Store suffer an immediate blow to its song library. "There are lots of hackers trying to hack into these things so that they can do things that would put us in noncompliance with the contracts we have with the music companies," Jobs explained. "We were very scared of that." The resulting impact on competing music services is something Jobs alluded to as "collateral damage." All told, the plaintiffs at large are seeking US$350 million in damages. Whether or not the trial will reach a conclusion, though, hangs in the balance. This past Friday Apple filed a motion to dismiss the case altogether after discovering that the two named plaintiffs did not purchase iPods during the relevant time period of the case. A ruling on that motion is likely to be handed down soon.

  • Apple files motion to dismiss iPod antitrust lawsuit after plaintiffs' stories called into question

    by 
    Yoni Heisler
    Yoni Heisler
    12.06.2014

    The iPod class action suit that went to trial this week may not run its course. As detailed by the New York Times, Apple has called into question whether or not the two named plaintiffs at issue actually purchased iPods during the relevant time period of the case. In a surprising turn on Friday, the lawyers suing Apple in the $350 million case withdrew one of the named plaintiffs after they concluded that she did not purchase an iPod between September 2006 and March 2009, the period in which Apple is accused of preventing music from competing services from playing on its iPods. What's more, it's not entirely clear that the other named plaintiff, one Mariana Rosen, purchased an iPod during the relevant time period either. Further, the iPod purchased by Rosen may have actually been purchased by her husband's law firm. As a result, the Times relays that Apple on Friday filed a motion seeking to have the case dismissed altogether. So what may end up happening here is a case that took nearly 10 years to get trial concluding with an unresolved whimper. Of course, seeing as how this is a class action suit, there are scores of other iPod owners party to the suit. As a result, lawyers for the plaintiffs are reportedly trying to get permission to position such a member as named plaintiff. With the Judge in the case reportedly noting, "I am concerned that I don't have a plaintiff", it'll be interesting to see how this plays out. A ruling on whether or not the case will be allowed to proceed may come as soon as this weekend.