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Apple Faces Potential Class Action Suit

2 Jan, 2007 By: Jessica Wolf

Apple is up against a potential class action suit in U.S. courts over the iPod/iTunes proprietary closed-environment.

The suit was actually filed back in July, with details revealed in the company's annual report filed Dec. 29 with the Securities and Exchange Commission.

California resident Melanie Tucker filed the complaint seeking class action status and charging Apple with “unlawful acquisition or maintenance of monopoly power” because music and videos purchased on iTunes are only compatible with the company's iPod. Tucker is seeking unspecified damages.

The suit was filed in the United States District Court for the Northern District of California. In November, Apple filed a motion to dismiss the complaint and on Dec. 20, that motion was denied.

Last Spring, Apples iTunes came under scrutiny of the French government for the same issue. There is a bill pending in the country that would make Apple's closed-use environment illegal and require the company to allow its system to work with competing players and downloading services.

One of those competitors is CreativeLabs, one of the first companies to release video-enabled handheld devices. In 2006 Apple was embroiled in litigation with this company as well.

As outlined in Apple's annual report, Creative Technology Ltd. and Creative Labs, Inc. filed a patent infringement suit against Apple back in May, seeking to permanently bar the release of iPods in the United States. Apple countersued Creative Labs in May and June for several patent infringement based on different patent numbers. As of Oct. 13, 2006, the companies reached an undisclosed settlement.

Meanwhile, the Wall Street Journal is reporting that Intertainer, Inc., a now-obsolete movie download service, filed a federal patent infringement suit Dec. 29 in U.S. District Court for the Eastern district of Texas against Apple, Google Inc. and Napster, Inc.

Interntainer, Inc. was among the first companies to launch as a digital-download provider, well before other services such as the now-growing Movielink and Apple's movie store, but made little inroads with studios for content or consumers for adoption. The service shut down in 2002.

Shortly after its shutdown as an Internet movie distributor, Intertainer filed suit against the Hollywood studios for anticompetitive behavior and settled that claim last year, according to the Wall Street Journal.

The company is seeking unspecified damages against the three emerging players in what is becoming a viable movie download market.

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