SEC filing exposes not-so-harmonious relationshipRealNetworks 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.
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.
Despite the shadow of potential litigation, Real said that while it has no idea if having iPod interoperability will boost its sales - "we do not know whether consumers will accept Harmony or whether it will lead to increased sales", the filing said - the company is sure not having the technology would prove detrimental.
"To date, Apple has not agreed to design its popular iPod line of portable digital audio players to function with our music services and users of our music services must rely on our Harmony technology for interoperability with iPods. If we cannot successfully design our service to interoperate with the music playback devices that our customers own, either through relationships with manufacturers or through our Harmony technology, our business will be harmed."