Apple Counter-Sued by Burst.com Over iTunes, iTunes Music Store and iPod

According to a Burst.com press release issued late Monday, Burst.com has filed counterclaims accusing Apple Computer of infringing four of Burst’s U.S. patents. In the counterclaims, filed in Federal District Court in San Francisco on Monday, April 17th, Burst alleges that Apple's iTunes Music Store, iTunes software, the iPod devices, and Apple's QuickTime Streaming products infringe Burst's U.S. Patents 4,963,995; 5,995,705; 5,057,932 and 5,164,839.

Burst's filing responds to a suit that Apple filed against Burst in January of this year, seeking a declaration that Burst's patents are invalid and that Apple does not infringe them. Burst requests in its counterclaims that Apple pay a reasonable royalty for Apple's infringing products and services, and also seeks an injunction against further infringement.

So what's this all about? It's hard to tell exactly because Burst's complaint simply broadly alleges violations of four of Burst's patents without explicitly stating how. Burst is requesting a jury trial in its counterclaim. Burst produces Burstware, software for audio and video distribution that stems from its first patent applied for in 1988 and issued in 1990. The other three were issued in 1991, 1992 and 1999.

According to Burst's 2005 Annual Report, it is a Delaware corporation located in 450 sqft of office space in Santa Rosa, CA, with three employees. It has a market capitalization of about $40 million, apparently due at least in part to its recent net settlement of $38 million with Microsoft. The latter was paid out nearly entirely in a dividend of $0.90 per share to shareholders. Over 80% of the company's stock is owned by the four corporation executives and board members. Burst noted that it had no sales of products for 2005. [Bill Fox]