Apple Wins iTunes DRM Case

An anonymous reader sends word that Apple's iTunes DRM case has already been decided. The 8-person jury took only a few hours to decide that the features introduced in iTunes 7.0 were good for consumers and did not violate antitrust laws. Following the decision, the plaintiff's head attorney Patrick Coughlin said an appeal is already planned. He also expressed frustrations over getting two of the security features — one that checks the iTunes database, and another that checks each song on the iPod itself — lumped together with the other user-facing features in the iTunes 7.0 update, like support for movies and games. "At least we got a chance to get it in front of the jury," he told reporters. ... All along, Apple's made the case that its music store, jukebox software, and hardware was simply an integrated system similar to video game consoles from Sony, Microsoft, and Nintendo. It built all those pieces to work together, and thus it would be unusual to expect any one piece from another company to work without issues, Apple's attorneys said. But more importantly, Apple offered, any the evolution of its DRM that ended up locking out competitors was absolutely necessary given deals it had with the major record companies to patch security holes.

Comments

I'm shocked.

[Anonymous Coward]

I can't believe the 700 billion dollar corporation won this.

Re:I'm shocked.

[alen]

i'd be surprised if apple didn't win the case. they blocked and non-apple DRM like every other company out there and Real had to hack it. but in the end itunes allowed you to use any hardware you wanted as long as the maker coded to a few of apple's API's. i use my Note 3 with itunes on my macbook. itunes itself has supported non-apple devices for many years as long as the files don't have any DRM.

Re:I'm shocked.

[Frobnicator]

i'd be surprised if apple didn't win the case.

At the jury level this is expected. The appeal was expected either way. And in the longer term this may turn out differently.

Anti-trust concerns usually do benefit the consumer in the short term. And as the article points out, the jury specifically wrote that the features have an immediate benefit to the consumer.

Usually anti-trust problems are not immediately bad for the consumer. In the short term the consumer sees a lower price, easier access, and other conveniences.

In the long term the market ends up with monopolies and oligopolies, a loss of vibrancy, a slowdown in innovation, less desire to follow expensive advances, and worse customer experiences. Think of your local telco and cable companies as prime examples.

I expect that like so many other technical cases the jury's verdict will be overturned on appeal because juries in the US rarely understand the actual law. While criminal law is usually pretty straightforward for a lay jury, things like IP law and business law are often miscommunicated or misunderstood when handed to a jury of random citizens.

Re:I'm shocked.

[dunkindave]

I expect that like so many other technical cases the jury's verdict will be overturned on appeal because juries in the US rarely understand the actual law.

Then it is good that the jury doesn't interpret the law - that is up to the judge and is (supposed to be) based on case law. The sole purpose of the jury during the trial phase is to determine facts, like given the judge's instructions about what the law is, did the defendant violate it, or based on the evidence, did the party do or not do the claimed action. Any appeal will not be based on the jury getting the wrong answer, it will be based on the judge giving the jury the wrong instructions about what the law is, or on what evidence was allowed in or not allowed in, or some other procedural issue, but not the jury's decision.

Re:I'm shocked.

[amaurea]

Doesn't the USA have a concept of jury nullification, where the jury does much more than just determine facts, and actually takes a position on what's right and wrong?

Re: I'm shocked.

[ColdWetDog]

Why was this modded down? It's the truth. Oh mods, cover the truth with your mod points. Yay.

When I was your age, we knew that you started out at -1 as an AC. And we liked it.

Kids these days.

Re:I'm shocked.

[nebaz]

Jury nullification has a tarnished history here, as it was often used in the South to acquit white men of lynching crimes. While it may be possible for a juror to use it, even mentioning it may be considered grounds for dismissal, or so I've heard. (IANAL)

Re:I'm shocked.

[tlhIngan]

Anti-trust concerns usually do benefit the consumer in the short term. And as the article points out, the jury specifically wrote that the features have an immediate benefit to the consumer.

Usually anti-trust problems are not immediately bad for the consumer. In the short term the consumer sees a lower price, easier access, and other conveniences.

In the long term the market ends up with monopolies and oligopolies, a loss of vibrancy, a slowdown in innovation, less desire to follow expensive advances, and worse customer experiences. Think of your local telco and cable companies as prime examples.

Or in this case, rendered utterly irrelevant.

Because iTunes sells unprotected music. Just like Amazon and many other music stores. iTunes is still #1, but their market share is sliding.

The iPods are on life-support - they don't make Apple much money anymore but Apple keeps them around because there's still a tiny demand for them.

And streaming services have basically taken over music sales - sales from iTunes and other stores is far lower nowadays while streaming services like Pandora and others are rising.

Whatever harm iTunes did, seems to have resulted in a far more vibrant marketplace now than it was years ago.

Re:I'm shocked.

[dunkindave]

Doesn't the USA have a concept of jury nullification, where the jury does much more than just determine facts, and actually takes a position on what's right and wrong?

Yes, but that is for criminal trials, not civil trials. Basically, for a criminal trial if the jury returns a verdict of innocent then the defendant walks, no matter how the jury reached that verdict, even if it blatantly goes against the evidence. Jury nullification isn't explicitly codified in law, rather it is a concept that people have applied that is based on how the legal process works, i.e. a jury that returns innocent ends the prosecution. It has been used for juries to deliver justice when people have been unfairly, but legally, charged with crimes.

A civil trial doesn't really have the same protection since a judge is allowed to toss a jury's verdict if he feels it goes egregiously against the facts of the case, but if he does he must defend his decision and he doesn't get to replace the verdict with his own, but rather he in essence declares a mistrial and it has to be retried. Again, this is for the trial portion where the jury's purpose is as a determiner of facts. On the other hand, the jury award during the penalty phase can be reduced by the judge. And like always, any such action by a judge better be defensible otherwise he opens it up to being overturned on appeal.

Just like in criminal trials, in civil trials juries are given wide discretion in order to allow justice to be served. For example, it is not uncommon for the plaintiff to be awarded more by the jury than the plaintiff asked for, or for the jury to decide with their hearts instead of what the evidence logically dictates. Since civil juries decide based on the preponderance of the evidence and that is subjective, the level that must be reached for the judge to be able to toss the jury's decision is pretty high, so overturning such jury results is not very common (though make big press when the few do happen in big cases).

Re:I'm shocked.

[JohnFen]

Whatever harm iTunes did, seems to have resulted in a far more vibrant marketplace now than it was years ago.

Be careful about confusing causation with correlation.

Re:I'm shocked.

[hondo77]

The iPods are on life-support - they don't make Apple much money anymore but Apple keeps them around because there's still a tiny demand for them.

That's true but the funny thing is that that "tiny demand" was well over a billion $$ in revenue in the past year. Funny how that much money is considered tiny...for Apple, anyway.

Huh?

[gstoddart]

Yet beyond monetary damages, the case has zero bearing on the modern technology industry, as both the MP3 music file format and the iPod itself have waned in popularity

Wait, what? People no longer use MP3s? They don't buy iPods?

This sounds like an odd claim ... I've got way more MP3s now that I did in 2005, and it's the primary way I listen to music. When I buy a CD (yes, I still do that) the first thing I do is rip it.

Sure, there are streaming services. But I'm betting lots of people still play MP3s on portable players.

It's not as glamorous, but saying MP3s have no bearing on the modern technology industry? I'm not buying that.

Re:Huh?

[Ixokai]

You can use non-apple devices with iTunes and the iTunes music store just fine. You have always been able to do so. I don't know why you'd want to because as far as mp3 managers go it kinda sucks, but you could plug a random mp3 player in and provided its not going out of its way to be weird, iTunes will detect it and list it on devices and it'll happily copy any non-DRM'd content to it.

All you could not do was use non-Apple devices with DRM'd music-- but no music is DRM'd anymore, so that's not relevant.

You also couldn't use DRM'd music from other services on Apple's devices, and you still can't, but that's not relevant either because there's no obligation for Apple to support anyone elses DRM.

The case is not about supposed non-existent DRM between iTunes and iThings, its about Real hacking Apple's DRM on files and trying to copy such hacked DRM'd content -- instead of plain straight up mp3s that iTunes always supported fine -- into an iThing. Apple closed the hole in their DRM and such hacked content was no longer valid.

But, that's not relevant anymore because Apple doesn't use that DRM on any music anymore. (They _do_ use it on non-music stores still, though)

Re:Huh?

[gnasher719]

It's still relevant, but an expected ruling. This is not about DRM on the songs, it is about DRM on the connection between iTunes and the devices. That is, you can't use a non-apple device with iTunes. And Apple can go out of their way to make that happen.

I think you are making the mistake of thinking that Apple was sued for something that remotely makes sense. They weren't.

Apple sold music with DRM in 2006. That music was hard or impossible to copy, as music with DRM should be. But that's not what Apple was sued for. And making it impossible for music with DRM to be copied is actually what DRM is there for.

Realnetworks had developed their own DRM "solution". Which had the unfortunate disadvantage that it didn't play on iPods, and it didn't play on Microsoft "Playforsure" compatible players either. So it was quite dead in the water. So Realnetworks decided to create a hack where they removed their own DRM, then put fake "FairPlay" (that's Apple's DRM) around it, and copied that to the iPod.

It turned out that they damaged directory structures on the iPod, and the iPod's "FairPlay" implementation noticed that there was something fishy about these files. Altogether so bad that Apple's software suggested that you reformat the iPod. And that is what these lawyers complain about: That Apple didn't allow their hacked DRM to play on an iPod.

The obvious and 100% iPod compatible solution would have been to remove the DRM and _not_ to try to add Fairplay DRM to the music. Music without DRM, like mp3, AAC, WAV, ALAC has always played on all iPods.

Re:Huh?

[bledri]

because the DRM has long since been dropped in the music space.

This is not true, even if Apple insists on saying it is. As near as I can tell, what they mean is that they aren't putting DRM on music that was added after the DRM-free date. However, the iTunes library is full of music that is as "protected" by DRM as it ever was. Or at least that was true three years ago, when I spent far too much time working out how to strip the DRM off of a song I downloaded from it.

No, they removed the DRM from the vast majority of their catalog and automatically upgraded songs in the iTunes library back in 2009. The reason that not all music is DRM free is not all labels and artists agreed to sell non-DRM music. Apple has to abide by it's contracts, even if it pisses a few people off.

it was a crap suit

[swschrad]

every time you have to move data from one system to another, it has to be flushed through some software to work on the new stuff. every time. all the way back to ENIAC, nothing is truly portable. I never had issues with iThingies, but then I never tried to use Real or Creative, either. and if I did, hey, flush the data through something else. like always.

Re:Yes this is Terrible.

[ArcadeMan]

Steve Jobs himself was anti-DRM (on music, at least): http://readwrite.com/2007/02/0...

It's a shame the original page isn't even on Apple's own website anymore.

Re:Yes this is Terrible.

[BarbaraHudson]

It should be pointed out that Apple later convinced the music labels to let them remove DRM from the iTunes Store. Which really kind of makes the whole thing moot.

It's moot - for now.
You say "Don't have a cow!"
But you never can know
How the wind will blow
Come the next lobbyist - politician pow-wow.
Burma Shave

Re:Yes this is Terrible.

[Ixokai]

DRM is so terrible that.... Apple did away with it on the music store years ago.

Its the content industry that is keeping it on the movie and tv stores. I am against DRM too but remember who requires it in their contracts to distribute.

Re:Yes this is Terrible.

[Anonymous Coward]

You mean other than they never wanted it in the first place.

Re:Good for consumers?

[KeithJM]

When DRM is a prerequisite to get the rights to offer the item to consumers at all. I'm not saying it necessarily WAS worth it, but the people who owned the rights to the music wouldn't allow downloads without DRM. So the options to bring it to market were download music with DRM, or don't download music legally. The consumer gets to decide whether they want that deal or not.

Re:Deals?

[Ixokai]

Your analogy is dumb.

The customers would never have had access to the music catalogs of the major music labels were it not for deals to implement DRM and patch holes when that DRM is exploited.

Real exploited a hole to create fakely-DRM'd content, and Apple had to close it or they'd be in breach of contract and suddenly the ITMS has no content.

(At least, in theory. In reality Apple got big enough by this point that they were able to muscle the labels into letting them un-DRM the entire catalog, which seems quite the opposite of illegally screwing customers.)

Re:Yes this is Terrible.

[Karlt1]

The only reason they did that is because Amazon beat them to it and was taking their customers away. If not for competition, Apple never would have removed DRM.

2/6/2007
http://macdailynews.com/2007/0...

"The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music."

  "Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."

5/30/2007

Apple starts selling DRM free music

https://www.apple.com/pr/libra...

9/25/2007
Amazon starts selling DRM free music,
http://readwrite.com/2007/09/2...

As you were saying?

Re: Yes this is Terrible.

[jbolden]

The more appropriate question is whether their prevention of competitors DRM Schemes on the iPod drove up prices of either the music itself or the iPod devices upon which said digitally purchased tracks could be obtained.

That's a hard question to answer in a suit against Apple. Certainly the RIAA wanted Apple to be nothing but a device manufacturer allowing a host of other formats and selling agents. At the same time the other ones available like Real they didn't want. So it is hard to find a monopolistic act where Apple wasn't under contract. That's a much better question for an anti-trust suit against the RIAA.
 

Re:Yes this is Terrible.

[Paradise Pete]

The court was asked to decide B not A.

The court was not asked to decide either one of those things. You're not even paying attention.

Re:Yes this is Terrible.

[GrahamCox]

It wasn't Apple being totalitarian, it was the music industry in general. All Real had to do to make their stuff work on the iPod was to remove ALL DRM. However, had they done that, they'd have been the ones in the dock at the behest of the RIAA, et. al. Eventually Apple's power and market dominance gave them enough clout to tell the music industry where to stick their DRM. And yes, that sounds "totalitarian", but actually, it was the consumer who benefited.

Seems to me that people just like to use the existence of the meritless case to push and reinforce their own anti-Apple views. Such views may have some validity, but to use this particular case and the history behind it to push them is ridiculous. We consumers enjoy DRM-free music today because of Apple, make no mistake. Do you really think Real (or Amazon, or whoever) would have managed the same thing if Apple hadn't? Nope - we'd still have crappy DRM-encrusted music from the industry or would be using the hit-and-miss GNUTella method.

Remember that any industry-backed music download service had to compete with free (albeit free with strings attached, in the form of terrible rips, mislabelled files and malware). Apple pulled it off, and they deserved to win this.

Re:Yes this is Terrible.

[OhPlz]

Article from 2009 announcing price cuts to iTunes music, mentions Apple has plans to go DRM free in the future:

http://www.computerworld.com/a...

From same article:

"While iTunes is the most popular digital music store, others have been faster to offer songs without copy protection. Amazon.com started selling DRM-free music in 2007 and swayed all the major labels to sign on in less than a year."

Awfully weird indeed.

Re: Yes this is Terrible.

[OhPlz]

I don't care what Jobs said. It's irrelevant. Amazon's store was DRM free. They had the major labels within a year. Apple did not. I don't care what Jobs said at the time. Amazon got it done while Jobs was still blathering on about it. Actions beat words. Apple didn't rid DRM from their catalog until Amazon forced them to. You can go on talking about Jobs all you want. I saw what actually took place.

Hardware margins are a fool's game. Apple is going to lose its shirt if it keeps betting on them. Digital goods is the future. Mark this comment and come back in a few years. You'll see. I also wouldn't bet against Amazon. They're making strategic moves now and sacrificing the short term to win big in the long term.