Real fears legal action from Apple over iPod DRM

By Jo Best

RealNetworks has revealed its attempt to break the DRM that protects iTunes might not only mean a hit on its bottom line but could also land the company in court. Real introduced its Harmony technology last year. It enabled consumers to buy iPod-compatible tracks from its online music shop. That involved breaking Apple's FairPlay DRM (digital rights management), which ensures that music bought from rival online music sellers won't play on the iPod. In a recent SEC filing, Real declared that should Apple update FairPlay to lock Harmony out - as it has done once before, only for Real to crack it again - it could affect Real's business. The filing said: "There are other risks associated with our Harmony technology, including the risk that Apple will continue to modify its technology to 'break' the interoperability that Harmony provides to consumers, which Apple has done in connection with the release of certain new products." The filing added that should that happen, Real would look at undoing the DRM once more: "If Apple chooses to continue this course of action, Harmony may no longer work with Apple's products, which could harm our business and reputation, or we may be forced to incur additional development costs to refine Harmony to make it interoperate again." Real has also not ruled out the possibility that Apple may want to see it in court over its DRM behaviour. The SEC filing added: "Although we believe our Harmony technology is legal, there is no assurance that a court would agree with our position. If Apple decides to commence litigation against us in order to prevent interoperation with its products, we may be forced to spend money defending their legal challenge, which could harm our operating results." While harsh words have been exchanged over the FairPlay saga - Apple said Real had used "the tactics and ethics of a hacker" - the Mac maker did not respond to a request for comment on the filing.