14 DAY TRIAL // News of the settlement between Apple and Burst last week was a much-needed closure to this never-ending story of litigation. Despite putting an end to several years of legal disputes, the deal itself is quite fishy, for more than one reason.
Last week's announcement of the Apple and Burst settlement came out of the blue, late Wednesday night. Such surprise announcements are not that uncommon when the two parties finally reach an agreement, but some believe that the timing of the announcement was not mere happenstance. Cringely writes that the timing was carefully chosen in order to bury the story, which was five days old by the time most major organizations were back to work. While indeed the timing does lend itself to such a purpose, the question of why would still have to be answered.
Just as interesting are the terms of the agreement, themselves. The license that Apple got excludes four patents, one issued and three pending, all dealing with digital video recording technology. At the same time, Burst did promise not to sue Apple for infringing on these patents, which were specifically not granted to the company. It makes little sense, as not giving someone a license to your patent normally implies that you reserve the right to be able to suit them, and agreeing not to sue them accomplishes the same thing as actually giving them a license.
Last but not least, the amount paid by Apple is very small, $10 million, compared to Microsoft's $60 million paid to the same company over the same patents. That sure doesn't seem a lot when you consider that Burst was going after Apple's iTunes and iPod cash cows. After paying over half of that for legal expenses, Burst is left with what seems like a token victory over an industry giant, but the actual terms of the settlement speak of something else.
Considering the nature of the patents that were not granted but sorta granted to Apple, and Burst's pattern so far, of targeting the strongest company in each segment, one would be inclined to think that the company will be going after TiVo next. Similarly, while Apple doe not actually have any products that could infringe on DVR patents at this time, they have something that comes close, in the Apple TV.
Whatever the two companies might have planed, it is clear that the settlement between them was carefully crafted, and in this case, what was not said may be even more important than what was announced.