Apple vs RealNetworks
In a press release, Apple claimed that RealNetworks may have violated provisions of the 1998 Digital Millennium Copyright Act (DMCA) by reverse-engineering the iPod to make it compatible with other audio file formats. RealNetworks countered those charges by claiming that all it was doing was taking advantage of a loophole in the DMCA allowing it to create software enabling "interoperability." As a defensive maneuver, Apple has threatened to alter the firmware underlying the operation of the iPod.
As configured at the factory, iPods can save and play iTunes and MP3 files. They can also record full-bandwidth digital files from ordinary CDs, at the expense of storage space, as explained by Gary Krakow in a recent MSNBC piece on getting the most out of the sleek little player. There is a thriving underground of iPod hackers, exploiting the device's capabilities for use as everything from an external hard drive to a universal remote control. Some users claim that the iPod's 32MB buffer could be problematic when dealing with WAV or AIFF files.
Apple's angry reaction against RealNetworks is uncharacteristic. The company has long tolerated private experimentation with its products, but almost none have presented any kind of economic threat. Intellectual property attorneys quoted in the financial press hesitated to guess as to which company would emerge victorious should the dispute go to court.