A Real Legal Problem For Harmony

A filing by Real with the Securities and Exchange Commission this week indicates that the company has acknowledged its Harmony software could put it in the legal crosshairs of Apple.

Originally reported by Macworld UK, the filing states, "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."

However, Real goes on to admit that defending Harmony in court could prove unwinnable. "Although we believe our Harmony technology is legal, there is no assurance that a court would agree with our position," the company writes.

Harmony is a program developed by Real to trick the iPod into thinking tracks downloaded from its music store have Apple's FairPlay digital rights management. The only DRM tracks that the iPod can play natively are those from the iTunes Music Store, which use FairPlay.

Apple shot back publicly last year, equating Real's actions to that of a hacker, and said that it was investigating the legal ramifications. "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," Apple warned.

In the filing, Real also visited the financial costs of continuing to battle Apple over the technology. Each time Apple updates their software to break Harmony, Real must "incur additional development costs" to ensure that Harmony will operate again.

In addition to fighting Apple over Harmony, Real disclosed it will spend $16 million this year in legal costs associated with its battle with Microsoft over Windows Media Player. In that case, Real has accused Microsoft of abusing its monopoly on the operating system market to promote its media format.