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12/18/2008
02:58 PM
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Apple Sued Over Apple TV

EZ4Media's lawsuit alleges that Apple TV, Airport Express, and Apple Macintosh personal computers infringe four of its patents.

Apple TV may still be struggling to find a place in the living room, but it will play an important role in an Illinois courtroom in the months ahead.

In a lawsuit filed against Apple on Tuesday, EZ4Media, a maker of wireless entertainment devices based in Bannockburn, Ill., said that the company's Apple TV, Airport Express, and Apple Macintosh personal computers infringe on its patents.

The patents at issue are U.S. Patent No. 7,130,616, 7,142,934, 7,142,935, and 7,167,765.

EZ4Media obtained the patents in question from Universal Electronics (UEI) in March. The company alleges that Apple hired three former UEI employees -- Nick Kalayjian, Bruce Edwards, and Wendy Goh -- about a year before it introduced Apple TV.

"Each of these employees had access to UEI's confidential and proprietary information and left UEI for Apple within 30 days of each other in the second quarter of 2005," the complaint says. "Apple TV was commercially introduced in September 2006."

Kalayjian, now an engineering manager at Tesla Motors, said that he wasn't involved in the development of Apple TV but declined to comment further. At Apple, he held the position of senior hardware systems integrator.

Concerns about knowledge workers taking their ideas to competitors often prompt technology companies to take legal action. About a week before Apple announced that former IBM VP Mark Papermaster would be joining the company to lead its iPhone and iPod engineering teams, IBM sued Papermaster for allegedly violating a noncompete agreement. Papermaster subsequently countersued and the dispute has yet to be decided.

Unlike intellectual property holding companies that exist purely to license and litigate, EZ4Media actually makes products based on its patents, such as its EZfetch digital media receiver.

In June, EZ4Media filed two other patent-infringement lawsuits, the first against Logitech, Netgear, and D-Link, and the second against Samsung, Pioneer, Yamaha, D&M Holdings, and Denon. Samsung was dropped from the second lawsuit when it settled for an undisclosed sum.

In its 10-K for fiscal year 2008, filed last month with the Securities and Exchange Commission, Apple says that it "is vigorously defending more than 21 patent infringement cases, 13 of which were filed during fiscal 2008, and several pending claims are in various stages of evaluation."

Apple, which has a substantial patent portfolio itself, says that the rapid pace of innovation in the electronics industry means that it may unknowingly infringe on the intellectual property rights of third parties.

Ironically, the rapid pace of innovation also means that patents aren't worth as much as they could be. That's because products on which they're based, Apple says, are "sometimes are obsolete before the patents related to them are even granted."

The article was edited on 12/18 to include statements by Kalayjian.

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