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7/29/2004
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Apple Threatens RealNetworks

The company says Real may violate federal law with software that lets customers play their songs on a variety of devices.

Apple Computer on Thursday issued a statement attacking RealNetworks Inc., a provider of digital-media services, for offering software lets online music buyers at Real's music store play their songs on Apple's iPod music players.

Many music-playing devices include proprietary copy-protection schemes that limit what music can be played on them, depending on what service that music was purchased from. Real said its software would allow songs downloaded from its music store to be played on Apple's iPods.

Apple said it's "stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod."

RealNetworks' software, called Harmony, was introduced earlier this week. Real describes it as the world's first digital-rights-management translation system that music buyers can use to transfer music from one secure music device to another. Among the devices supported by Harmony are those made by Creative, iRiver, palmOne, RCA, Rio, and Samsung.

Apple said it's investigating "the implications of their actions under the [Digital Millennium Copyright Act] and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods."

The Digital Millennium Copyright Act was passed into law in 1998 and makes it illegal to circumvent encryption and copy-protection technology to access copyright-protected property.

Legal experts say that unless Apple can show that RealNetworks reverse engineered Apple's iPod software, it could be very difficult to make a case under the DMCA.

"First question is, to develop Harmony, did RealNetworks have to break copy protection used by iTunes?" says Mark Rasch, former head of the U.S. Department of Justice's computer crimes unit and now senior VP of security services firm Solutionary Inc. "But even then there are exceptions under the DMCA for interoperability."

Another question would be whether or not RealNetworks reverse engineered iTunes software to create Harmony. ITunes is the name of Apple's online music store. "We really need to know more about how Harmony was developed and how it works to understand the potential legal implications," Rasch says.

In a statement E-mailed to InformationWeek, RealNetworks contends that Harmony follows "a well-established tradition of fully legal, independently developed paths to achieve compatibility. There is ample and clear precedent for this activity, for instance the first IBM-compatible PCs from Compaq.

"Harmony technology does not remove or disable any digital-rights-management system. Apple has suggested that new laws such as the DMCA are relevant to this dispute. In fact, the DMCA is not designed to prevent the creation of new methods of locking content and explicitly allows the creation of interoperable software," the statement reads.

RealNetworks says it's "fully committed" to its Harmony technology.

"The problem with the DMCA is that it gives more protection than copyright law and it allows companies to skew the market with a form of protectionism," Rasch says. "It allows technological protectionism to be legally adopted, and it works to prevent people from coming to market with cheaper compatible products."

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