Apple’s Bloodiest Patent and Copyright Clashes

Apple’s Bloodiest Patent and Copyright Clashes

If Palm ends up in court over the Pre’s multitouch, it’ll join a prestigious line of firms that have tussled with Apple, which loves a good legal battle almost as much as sexy aluminium.

In Apple’s legal trail are, for the most part, corpses. Save for one little skiffle with you-know-who that haunts them to this day. And along their bloody way, they’ve managed to be involved in several landmark decisions that continue to shape technology IP law to this day. Behold, Apple’s most important legal disputes, arranged by date:

Apple Computer Inc v. Apple Corps – 1978-2007
Back in the tender year of 1978, when news of wily upstart Apple and their crazy “computers” filtered across the pond to the folks at the Beatles’ famed Apple Corps label, they stopped drinking tea and doing hash long enough to realise they still had a business, and that they should protect their trademark. They settled three years later, with Apple Computer paying Apple Corps $80,000 and entering into a gentlemanly agreement to stay off of each other’s turf–no music business for Jobs, and no Beatles-branded personal computers for the Brits. It sounded like a good idea at the time.

In 1991, litigation cropped up again when Apple Corps. lawyers realised that a handful of Macs with built-in MIDI hardware or CD-ROM drives could be used to play back and create music (a computer? play music? what?). This resulted in another payment to the Corps, to the tune of $26.5 million, and the creation of the “sosumi” alert sound (So. Sue. Me.) that lives on in OS X to this day.

But it wasn’t over yet: A little thing called the iTunes Music Store perked up the Beatles’ lawyers’ ears again in ’03, but a judge ruled in favour of Apple Computer three years later, claiming a distribution network did not count as an entry into the music business as spelled out by the original agreement.

All was settled, finally, in 2007: After Jobs was spotted getting love-y with the Beatles in his keynotes, the two companies announced that Apple Inc. would now own all of the Apple-related trademarks the two had spent the last two decades fighting over, licensing the Corps’ own trademarks back to them for their use. Meanwhile, we’re still waiting for that Beatles discography to hit the iTunes store—or anywhere on the internet.

Winner: Apple

Apple Computer Inc v. Franklin Computer Corp. – 1982
Franklin, they of tip calculators and pocket dictionaries, produced the Franklin Ace 100, a line of Apple II-compatible computers in the early 1980s. Said Apple II compatibility, however, was achieved by doing the ol’ Ctrl-A Ctrl-C Ctrl-V on Apple’s OS and ROM source code. Franklin was pretty sloppy about it: They didn’t even bother to replace strings in the code that were obviously unique to Apple’s version, including “James Huston,” an Apple programmer and the word “Applesoft.”

The district court initially agreed with Franklin’s defence, which treated the code not as a written work which could easily be copyrighted, but more like a machine part, the shape of which needed to match the other “parts” it would be compatible with. The Court of Appeals disagreed, however, and in doing so, set the first legal precedent proving that computer software itself (the actual code) could be protected by copyright, not just the visual and more tangible results of the software.

Winner: Apple

Apple Computer Inc. v. Microsoft, Xerox and Intel – 1983-1997
When Apple’s John Sculley first saw early versions of Bill Gates’ rough and buggy Windows 1.0 OS in 1983, he spotted a number of UI elements, such as window menu bars and apps like Write and Paint, which he viewed as direct rip-offs of the soon-to-be-released Mac OS and its MacPaint and MacWrite applications. No one at Apple though was too worried–their revenues of well over $1 billion dwarfed Microsoft’s $25 million in software sales at the time–so they struck a deal with Gates, allowing him to licence infringing UI elements for a fee (elements many would argue were themselves licensed/stolen from Xerox) in exchange for giving Macs exclusive access to Excel for two years. At the time the Mac platform had all the momentum, and Microsoft was just an app maker, essentially, with a hobbyist OS on the side. Sculley believed their agreement was valid only for the 1.0 version of Windows and that it was a great deal.

And then along came Windows 2.0 in 1987, and with it, one of the landmark software “look and feel” disputes to date.

Windows 2.0 was significantly more polished (and successful) than the previous version, and Apple had to act quickly to quell a rapidly-strengthening competior. They claimed Windows 2.0 ripped off the Mac OS even more extensively and illegally than before. Apple argued that things like overlapping, resizable windows, a “desktop” with icons, and specifics like the trash can all amounted to a single entity referred to as “look and feel,” which could then be protected as a whole via copyright (which MS was allegedly infringing). This was essentially a move by Apple to gain exclusive use of the “desktop” GUI metaphor, which is now ubiquitous to all modern operating systems. It would have been a gigantic legal coup.

Meanwhile, Xerox filed a defensive suit against Apple, claiming they were the actual source of the disputed GUI elements, hoping to in turn win control over the “desktop” should Apple win its case against Microsoft. It was dismissed on the grounds of a statute of limitations technicality.

Then Apple’s case fell apart on a technicality of its own. The judge, not buying the “look and feel” voodoo, insisted on treating each UI element as its own infringement. And of Apple’s list of 189 infringing elements, he judged all but ten to be legal under the original licensing deal Sculley made for Windows 1.0, which the court found to still be applicable to Windows 2.0, much to Apple’s shock and chagrin.

The suit was bloody, and it lasted four years. When the judge ruled in Microsoft’s favour in 1992, Apple tried to appeal to the Supreme Court, and was denied. Even so, bad blood continued to bubble until 1997 (along with additional side lawsuits that alleged Microsoft and Intel ripped off QuickTime code for optimising video in Windows), until a final agreement was made. With Apple floundering and Windows the undisputed OS king, the deal tipped heavily in Gates’ favour: It stipulated that Microsoft should continue to develop Office for the Mac (by then a huge bargaining chip), but at the same time forced Apple to make Internet Explorer its default Mac OS browser (ahem, seeds of anti-trust, ahem), and gave MS the chance to buy $US150 million worth of bargain non-voting Apple stock–a 10% share. And of course, Windows could keep being Windows.

So in the end, what started in Apple’s mind as a promising play for exclusive rights to the entire graphical user interface schema as we know it became a massive financial and legal defeat that continues to define the two companies to this day. Fanboys, this is where your hatred was born.

Winner: Microsoft

Apple Computer Inc. v. eMachines – 1999
Jobs returned to a still-smoldering Apple in 1997, and with him came the iMac a year later, which promptly inspired everything from steam irons to George Foreman grills to come adorned in colourful candy plastic. But eMachines, makers of cut-rate Wintel hardware, hit a little too close to the bone with their eOne, which was released a year after the original Bondi iMac. The eOne looked almost exactly like the iMac, and came pre-loaded with Windows 98 at a price point $US400 below the iMac’s–a recipe for litigation. Apple took eMachines to court citing a somewhat obscure “trade dress” infringement, which is effectively a way for companies to trademark and defend distinctive industrial and graphic designs that aren’t literal trademarks themselves. They successfully shut down sales of the eOne, and eMachines went on to get folded into Gateway and then Acer, where they now continue to crank out Best Buy-filling cheapos to this day.

Winner: Apple

Apple, Inc v. Creative Technology, Ltd. – 2006
In 2006, Creative was awarded a patent for browsing hierarchical listings of music files in MP3 players it had applied for five years earlier in 2001, just barely nicking out similar patents filed for Apple’s then-nascent iPod. Creative immediately attempted to leverage the patent, filing suit against Apple for infringement; Apple responded by counter-suing on the basis of several other Apple patents its lawyers found being infringed upon in Creative’s Zen players. Yep, it was an all-out patent war, which was eventually settled to Apple’s clear advantage: Apple agreed to break off $100 million in licensing fees to Creative (a pittance compared to its $1.5 billion in iPod revenues that quarter) for rights to the disputed patent moving forward. Creative didn’t get the international injunction on iPod imports it wanted, but $US100 million was an 85-cents-per-share boost for their quarterly profits. And in a trademark Jobsian zing, Steve remarked in Apple’s press release: “Creative is very fortunate to have been granted this early patent.” Translation: “Look at you, Creative, so cute with your patents. Take this $US100 million I found under the seat of my SLR Benz and go buy something nice. And, oh, don’t think about trying this ever again.”

Winner: Apple

Apple Inc. v. Cisco Systems, Inc. – 2007
Remember the original iPhone? We sure do. And so did Cisco, who owned the trademark since 1996 for a VoIP product. Apple knew this and didn’t care, and the day after Jobs announced iPhone 1.0, Cisco filed an infringement suit. But it didn’t last long. Our guess is that El Jobso took Cisco boss John Chambers out for a nice dinner, reminded him that he made his billions on internet backbone infrastructure and not shitty 6-year-old VoIP phones, and the whole thing was settled before the appetisers were cleared. Just over a month later, the two companies announced they would share the iPhone name like good little boys, and would even “explore” opportunities for “interoperability.” Do you see how Apple can’t resist the condescension in the press releases? Writing Apple press releases must be fun, as far as press-release writing gigs go.

Winner: Apple

Apple Inc. v. Psystar Corporation – 2007-Present
This one’s still brewing. Apple claims Psystar’s Hackintoshed “Open Computers” violate the OS X licence, which dictates that the OS only be run only on official Apple or Apple-approved hardware. Apple sued for this violation in July of this year, and the two parties have been lobbing legal clown pies back and forth ever since. Psystar’s claims tend to border on the outrageous, including a claim that Apple’s copyrights on OS X are invalid due to “failure to register said copyrights with the copyright office as required.” Something tells me that’s a little task Cupertino’s law troupe would not let slip off their to-do lists.

Documents have surfaced that indicate the two companies are pursuing alternative dispute resolution (for settling the matter privately and out of court), but the volleys are still flying–the most recent being Psystar’s claim this month that everything is fine and dandy since they legally purchase each copy of OS X they (illegally?) load onto their Open Computers. It’s a tangled web, and if Apple’s tendency to shut down even the slightest hint of Hackintoshing is any indication (just ask Brian from Wired), this case will eventually reach a settlement or a trial. Meanwhile, you can still order (or at least pay for) an Open Computer on Psystar’s site.

Winner: TBD??

One thing is clear: It takes a Microsoft to beat Apple at the patent and copyright litigation game. Not even the Beatles could win, in the end. And even when facing a Microsoft-calibre opponent, the grand mal Microsoft-Apple suit for all the bananas was essentially settled over a technicality arising from a Sculley-helmed Apple’s sloppy contract writing. Microsoft got lucky.

So is Palm ready to bet their entire company on the Pre’s multitouch? Many agree that without the Pre, there isn’t much of a company left anyway, so there’s no reason not to. And these days, patents provide only the squishiest legal ground that gets squishier by the day–to the extent where almost every software-specific patent can be “designed around” to achieve an almost imperceptibly similar user experience without infringing earlier patents.

The fact remains, the iPhone is now the gem in Apple’s crown and the truest embodiment of the company’s soul. Jobs and his army of lawyers aren’t going to let it be challenged without a fight.