Your invention is the basis for a product being sold to millions worldwide generating millions of dollars of revenue.  This should make you a millionaire, right?  Not always!

In Apple Computer, Inc. v. Burst.com, Inc. 2007 WL 33428929 (N.D.Cal. 2007) Apple defended an infringement claim by asserting the underlying technology used in its digital audio player (iPod^®) was actually invented as early as 1979 before many of its customers were even born.

In the case Apple Computer sought a declaration of invalidity and noninfringement of four U.S. patents owned by Burst.com.  These patents related to the sharing, editing and playing of audio and video works through computers.  In support of its contention of the invalidity of the patents owned by Burst.com, Apple Computer asserted U.S. Patent No. 4,667,088 issued to Kane Kramer taught the invention claimed in the Burst patents, thus rendering those patents invalid for anticipation or obviousness.

You may be asking yourself why doesn’t Kramer assert his U.S. patent against Apple and obtain royalties from the sales of iPod^®?  The reason is his U.S. patent expired in 1991 and his British patent expired in 1988.  The iPod^® first went on sale in late 2001.  Therefore, Apple was never in fear of any litigation or request of royalties from Mr. Kramer.  While Apple owns several patents related to aspects of the iPod^®, the core technology used in the iPod^® was the subject of patents expiring a decade before the iPod^® was introduced.

The iPod^® clearly enjoys enormous success.  This success is attributable to marketing, ease of use, the user friendly nature of iTunes^® to keep its competitors at bay and the improvement patents owned by Apple related to features of the iPod^® making it attractive to the consumer.  Imagine if Apple had an enforceable patent similar in scope to Mr. Kramer’s to protect a digital audio player.  Apple would not only hold the dominant market position it holds today, but would likely hold a monopoly.  No doubt Mr. Kramer’s name would be mentioned with those of Steve Jobs and Bill Gates.  Unfortunately for Mr. Kramer, he was ahead of his time. 

Jim Paige          (612) 392-7310           Jim.Paige@nm-iplaw.com