Microsoft Beats Rival to Punch in Filing Similar Application on MP3 Software

By Connie Guglielmo and Joel Rosenblatt

Bloomberg News

Friday, August 12, 2005; Page D05

Apple Computer Inc., whose iPods are the top-selling music player in the United States, lost an attempt to patent some of the device`s technology because rival Microsoft Corp. had already filed a similar application.

Microsoft beat Apple to the patent application by five months, U.S. Patent and Trademark Office documents show. Apple`s request, filed by chief executive Steve Jobs and other officials in October 2002, was rejected by patent officials last month.

Apple`s proprietary MP3 players, iPods, have dominated sales in the United States. (By Nate Lankford For The Washinton Post)

Apple plans to appeal the decision to ensure it won`t be forced to pay royalties to Microsoft on every iPod sale.

The iPod accounts for 75 percent of all MP3 players sold in the United States, according to NPD Group Inc. in Port Washington, N.Y. Cupertino, Calif.-based Apple has shipped 21.8 million iPods since Jobs introduced the player in October 2001, with 18.1 million units sold in the past four quarters alone.

``Apple invented and publicly released the iPod interface before the Microsoft patent application cited by the examiner was filed,`` Apple spokeswoman Natalie Kerris said yesterday in a statement. The company has received other patents related to the iPod and has other patents pending on the device, she said.

Apple`s application, filed a year after the iPod was introduced, was rejected July 13. The documents do not identify the iPod by name, a common omission in such petitions. It describes a ``portable, pocket-sized multimedia asset player`` capable of managing MP3 music files including ``a song title, a song artist, a song album, a song length.``

The rejection was reported Tuesday by AppleInsider.com.

Microsoft`s application describes playlist software used to manage music on MP3 players, personal computers and other digital devices. Apple`s application covers, step by step, how users navigate through its iPod music software and how they use the device to select songs.

Microsoft employee John C. Platt applied for the patent on behalf of his company in May 2002.

``Our policy is to allow others to license our patents so they can use our innovative methods in their products,`` David Kaefer, director of intellectual property licensing and business development at Microsoft, said in a statement.

Microsoft`s application was rejected in December 2004, patent office records show. Platt amended the application in April 2005, and on June 27 the office indicated that Microsoft`s pending patent would be approved.

Apple can appeal the decision on its application to the patent office`s Board of Patent Appeals and Interferences, said Brigid Quinn, a patent office spokeswoman. That appeal can take up to 18 months, she said.

If the patent is rejected again, Apple can take its case to the federal courts, which have the power to overturn the patent office`s rejection.

The iPod already faces competition from Microsoft-powered music players. Microsoft said this week it is working with electronics makers to design new devices for release in the end-of-year shopping season.