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Thursday, November 30, 2006, 12:25 pm PT (03:25 pm ET)

Apple gains control of critical digital download patent

A recent out-of-court settlement between Apple Computer and a Vermont-based inventor has landed Apple the rights to a prestigious software design patent that may allow the company to seek royalties on a broad spectrum of digital downloads.

Michael Starkweather, a lawyer and author of the 10-year old patent, issued a statement on Thursday calling it a "billion dollar patent" that will have affects on the future of the "cell phone, iPod and PDA" industries.

"I believe that, with this patent in hand, Apple will eventually be after every phone company, film maker, computer maker and video producer to pay royalties on every download of not just music but also movies and videos," he said.

Starkweather, who wrote the patent in 1996 for David Contois of Essex Junction, Vt.-based Contois Music Technology, said the inventor originally didn't show interest in patenting the idea nor did he understand its value.

The initial concept consisted of a desktop computer holding multiple songs with an interface that allowed a hotel guest to select three songs and play them on an electric grand piano.

Realizing that downloading movies was an obvious variation to downloading music, Starkweather broke the patent into three elements; remote music storage, selection of music to download and playing music on a music device.

"Sometimes it's easy to break an invention down to its key components," he said. "That's why patent writing is an art, not a science, and requires creativity."

In June of 2005, Contois asked a Vermont District Court to issue a preliminary and permanent injunction barring Apple from further distributing its iTunes software. In a 10-page complaint, which was first reported on AppleInsider, lawyers charged the Cupertino, Calif.-based iPod maker with "copying" and "willfully infringing" on Contois design patent in developing the digital jukebox software.

The suit stated that Contois conceived and developed a computer interface for playing music on an internal or external computer-responsive music device, which he then exhibited at the 1995 COMDEX trade show and the 1996 NAMM music industry trade show. According to the filing, people who were at the time employed by or later became employed by Apple were present at both trade shows and viewed Contois' software. The suit alleged Apple later "copied" the invention and used the design ideas in the interface for iTunes.

Specifically, the filing documented 19 interface aspects of the Apple software that it claimed were in direct violation of Contois' patent. The areas included iTunes' menu selection process to allow the user to select music to be played, the ability of the software to transfer music tracks to a portable music player, and search capabilities such as sorting music tracks by their genre, artist and album attributes.

Following a 15-hour negotiating this September, Contois and Apple ended their dispute by reaching an out-of-court settlement. The terms of the deal were not disclosed.