Disappointed iPod Plaintiffs: Jurors Didn’t Weigh the Right Questions

After a 10-year knock-down drag-out battle, Apple on Tuesday prevailed in a class-action lawsuit over its use of digital rights management technology on iPods purchased between Sept. 1, 2006 and March 31, 2009.

Robbins Geller Rudman & Dowd — one of the “most feared litigation firms” in the U.S., according to BTI Consulting — brought the suit in the United States District Court for the Northern District of California. The plaintiffs will appeal the decision.

“There are numerous grounds for the appeal that occurred over the years,” Robbins Geller lawyer Patrick Coughlin told the E-Commerce Times.

The jury should have considered a more narrow construction, he said.

“We think the jury should have been considering firmware and software updates, but what went back to the jury is an array of issues dealing with all the updates — physical updates relating to screens, battery size, iPods, and physical characteristics like thinness.”

The Issues at Dispute

The lawsuit revolved around iTunes 7.0 and 7.4, which were released in September 2006 and 2007, respectively, to improve security and add new features.

The plaintiffs alleged they were released simply to prevent iPod owners playing streaming music from vendors other than Apple, such as RealNetworks, on their devices. Apple’s system had not yet been hacked, so there was no reason to update iOS, they contended.

However, the jury agreed with Apple, which contended the security updates were necessary and improved its products.

Oh, the Drama!

One of the three original plaintiffs dropped out early in the proceedings, leaving two to carry on, until recently.

An economist testifying for the plaintiffs, Roger Noll of Stanford University, agreed in court that he had not assessed any impact from the introduction of iOS 7.4.

Then both the named plaintiffs had to drop out because they had not purchased their iPods during the relevant period, leading to speculation that the case would be tossed.

Judge Yvonne Gonzalez Rogers rejected Apple’s motion to dismiss and ordered the plaintiff attorneys to identify new plaintiffs.

“There were people coming out of the woodwork to volunteer as plaintiff,” Coughlin said. Judge Gonzalez eventually accepted Massachusetts business consultant Barbara Bennett as a fresh plaintiff, but Bennett was not called upon to testify.

The judge “presumably thought that there undoubtedly were actual consumers who would have been legitimate class members, and that there was a real substantive issue that deserved to be resolved now rather than having another lawsuit and another trial,” Cornell Law School professor George Hay told the E-Commerce Times.

10 Years After

“This lawsuit is as much about the things that weren’t said as about the things that were,” said Mike Jude, an analyst at Frost & Sullivan.

Apple “is a very large target and extraordinarily huge in terms of capitalization, and it seems there just was this deep desire to find against Apple regardless of the merits of the case,” he told the E-Commerce Times. “The fact that the court wanted to prolong the case, the fact that nobody checked very hard to see if the plaintiff had standing — these are procedural things.”

The Case of the Disappearing Plaintiffs

Questions inevitably were raised when the last of the original plaintiffs dropped out. Did nobody conduct due diligence? Was someone trying to pull a fast one?

“It sounds like someone didn’t check carefully enough,” Cornell’s Hay suggested.

Not so, Coughlin said.

“When Apple notified us about the iPods at issue, we had two plaintiffs that had the iPods on the list,” he explained. “Two years later, Apple modified the list, and the plaintiffs’ iPods weren’t on it.”

Robbins Geller has decided to press on.

“The jury was not involved in the class issue,” Hay said. “If I understand the process, the jury was asked simply whether the update was an improvement, and not asked to do any balancing with respect to the possible pro- and anti-competitive effects of the charge.”

Richard Adhikari

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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