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Thursday, February 07, 2008, 12:40 pm PT (03:40 pm ET)

Apple hit with summons over iTunes Store Allowance feature

Apple this week came under legal fire from a small California firm that claims to hold a patent on concepts used by the iPod maker to facilitate the 'iTunes Store Allowance' feature of its industry leading digital download service.

In a scant complaint barely stretching 6-pages, Newport, Beach-based Restricted Spending Solutions (RSS) asserts that it developed in 2001 and successfully patented five years later methods for a "controlled entertainment spending account" that were later adopted by Apple without its authorization.

Specifically, RSS points to its November 28, 2006 Patent No. 7,143,064, which describes a "computer-based method for allocating funds in pre-established accounts for use by customers, by creating for each customer a customer account file containing a record of funds deposited for the customer, and limiting how the funds in each customer account file may be spent on audio and video entertainment."

By its own account, Apple describes its similar 'iTunes Store Allowance' feature — believed to have been implemented sometime in 2004 or prior — as "a nifty way for you to give a gift that keeps on giving. [It] allows you to send a monthly iTunes Store credit to a family member, friend, or colleague in an amount from $10 to $200. Each month, your chosen amount will automatically be added to your recipient's iTunes Store account."

In its complaint, filed Wednesday in an Illinois district court, RSS alleges that Apple has had full knowledge of its patent since at least July 7, 2005, and has thus caused irreparable injury by virtue of its infringement.

iTunes Store Allowances


RSS is requesting that the Court permanently enjoin Apple from further infringement, award it attorney's fees and treble damages, and mandate that Apple destroy or hand over all products that incorporate features covered under its patent.

The little-knonw firm also demands that Apple send a copy of any decision in the case favoring RSS to each person or entity that made use of iTunes Store Allowances.