Apple Settles Burst Lawsuit
$10 million settlement gives Burst second major out-of-court patent defense win in as many years.
Tues., Nov. 27, by Tim Siglin
Back in April 2006, a little over a year after Burst had made the giant blink by settling antitrust and patent-infringement claims against Microsoft for $60 million, Burst made good on its claim to use its proceeds from the Microsoft settlement to "pay off long-term debts, enforce patent claims against other companies, and to pay shareholders."
The target of Burst's second patent claim enforcement was Apple Computer (now known, simply, as Apple). In April 2006, several months after CEO Richard Lang told technology pundit Robert X. Cringley that Apple had broken off negotiations and filed a suit against Burst, Lang and company filed a countersuit against Apple. Lang's comment that his company was willing to continue negotiations and that Apple’s actions were "an attempt to get the suit on their turf" struck a chord with those who felt Apple was moving in the same direction as Microsoft, thumbing its nose at a defensible streaming patent that had been in place from the early 1990s.
In the Microsoft case, Burst's initial lawsuit against the company in 2002 was "among the first round of antitrust lawsuits filed by Microsoft competitors following settlement of the U.S. government's antitrust case," according to The Industry Standard. The case was based on an incident back in 1999 where Burst showed its technology to Microsoft under what it claims was an NDA, only to be told it was of no interest to the software giant. Yet, in 2001 the Windows Media 9 technology contained the very type of delivery system that Microsoft had feigned disinterest in. Fortunately for Burst, its suit against Microsoft was championed by a significant number of larger competitors who saw in the Burst case a path forward for their much larger anti-trust suits.
Once Microsoft chose to settle Burst's claim for $60 million, Apple chose to file suit against Burst, asking for the patents to be invalidated. Apple was able to do this because Microsoft had settled out of court, meaning it was in effect paying a licensing fee of $60 million but still leaving the legal question unanswered, since no court decision had been made on the legitimacy of Burst’s patents.
Burst, in its countersuit, accused Apple's iTunes and QuickTime of infringing on its patents; Apple claimed it already possessed similar technology before those patents were granted.
Unwilling to settle initially, Apple chose to fight the claim and allowed the case to go to its initial trial phase, known as a Markman phase. Unfortunately for Apple, the California judge presiding over the Markman hearing announced her findings in May 2007. In almost every instance, the Markman rulings (setting the definition of particular terms and initial validity of wording of the key patents) went in favor of Burst, strengthening both the validity of Burst’s claims, and the likelihood that it will prevail in its countersuit against Apple.