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Real Worried About Apple Lawsuits
sebFlyte writes "silicon.com is reporting that Real is very worried that Apple will sue it over its Harmony technology that 'breaks' iTunes' FairPlay DRM to allow its music to play on the iPod. They acknowledged in an SEC filing that a lawsuit from Apple would potentially be very damaging to the company's bottom line, as it accepts that a court might not agree that the reverse-engineering is legal."
If you reply, do so only to what I explicitly wrote. If I didn't write it, don't assume or infer it.
According to Real, the ability to play a different form of DRM'd files on the iPod while still keeping it DRM'd.
Non-DRM'd mp3s, as you point out, will just play fine.
Lost at C:>. Found at C.
is this the first time I'll be rooting FOR Real?
Neither side is acting in particularly good faith on this issue.
BUT, before all of Slashdot flies off the handle on this "story", I think it's worth pointing out that this is an SEC filing, and it is every company's responsibility, in fact under the law, to state all possibilities that may negatively affect a business, however remote those possibilities may be. I don't think it's any secret to anybody that Apple could sue Real, and that there is at least a chance that Apple would win (because you just never know what can happen in the courts). Given that, Real must disclose this information to investors.
The news here seems to be that Real is "admitting" to something that seems to be common sense. But Real has to admit that they're at risk of a lawsuit, and that there's a chance that they would lose - to do otherwise would be fraud. It would be withholding information in order that people would continue buying their stock.
If you are not used to reading these SEC filings, even the healthiest of companies can seem to be in pretty dire straits once you get to the "risks" section. These are worst-case scenarios, presented basically to cover the company's ass from class action lawsuits and SEC investigations should the unthinkable happen. That doesn't mean anything listed as a risk will happen, or even has a good chance of happening. It's kind of the same as putting a warning label on a 9 volt battery that says "warning! eating this battery may cause injury!" I mean, duh. But they have to put that label on there or you just know that one idiot who eats that battery and gets sick is going to sue.
The courts recently ruled that reverse-engineering hardware (Lexmark printer catridges, garage door openers) is legal and the DMCA doesn't apply for purposes of interopability. If you approach the potential case of Real getting sued by Apple about Rhapsody, it's the same concept: reverse engineering software (vs hardware) for purposes of interopability. Should be cut-and-dried, but who knows which way the courts will go.
It's about the reverse engineering exception under the DMCA. This concerns why it was done (interoperability) not how it was done.
DMCA 1201 (f) (1) provides:
This would appear to permit circumvention of a technological measure that effectively controls access to a copyrighted work for the purposes of achieving interoperability (such circumvention otherwise being banned by secion 1201 (a)(1)(A)). That appears to be what Real have done. So it IS about the legality of reverse engineering in this particular scenario.
Note: I'm not saying that they are legally in the clear, just that reverse engineering (as the term is used in the DMCA) IS what they are talking about.
To summarise the summary of the summary: people are a problem. ~ h2g2