Edible Apple

It seems like forever ago, but it really wasn’t until April 2009 that Apple began offering iTunes downloads free from the shackles of DRM. Prior to that, downloaded songs were only playable on iPods, effectively tying consumers who used iTunes for music downloads to Apple hardware. This understandably irritated some consumers who wanted to enjoy the iTunes Music Store yet who preferred MP3 players that didn’t come from Cupertino.

This irritation was not alleviated by the fact that Apple was only able to secure the right to sell music downloads if it shrouded songs in DRM. Nor was this irritation lessened by a work-around wherein users could burn downloaded songs to a CD and rip them back DRM-free. And, of course, this irritation was only exacerbated by the fact that Apple’s DRM, called FairPlay, also prevented Apple’s lineup of iPods from playing songs purchased from competing online music stores.

So in 2005, Thomas Slattery filed a lawsuit in a California District Court alleging that Apple was in violation of antitrust laws. Slattery’s complaint read in part, “Apple has turned an open and interactive standard into an artifice that prevents consumers from using the portable hard drive digital music player of their choice.”

Now, six years later, US Magistrate Judge Howard R. Lloyd has given the the prosecution the go-ahead to conduct a limited deposition of Apple CEO Steve Jobs. Slattery’s attorneys sought to widen the scope of their deposition to include questions pertaining to Apple’s refusal to license their proprietary FairPlay technology, but Lloyd deemed it to broad. Instead, Jobs’ deposition cannot exceed two hours and must be limited to an October 2004 software update to FairPlay that rendered music files downloaded from RealNetworks inoperable on the iPod.

While deposing CEOs as prominent as Steve Jobs is rare (see below), Lloyd explained that “Jobs has unique, non-repetitive, firsthand knowledge about the issues at the center of the dispute over RealNetworks software.” The Plaintiffs in particular point to an AP article which states that RealNetworks’ CEO contacted Jobs in 2004 to ask about licensing FairPlay, only to be rebuffed by Jobs.

A number of similar antitrust lawsuits regarding iTunes DRM have been levied against Apple over the past few years, though most of those claims have since been dropped. The remaining active claims, of which Slattery’s lawsuit is a part of, have since been merged into one under the title, “The Apple iPod iTunes Antitrust Litigation.”

Jobs was originally supposed to be deposed in late 2010, but that was delayed presumably due to issues surrounding Jobs’ health. Jobs of course announced he was taking a leave of absence from Apple to tend to undisclosed medical issues. Apple, for what it’s worth, filed a number of motions seeking to prevent any deposition of Jobs at all, but came up short in that particular legal battle.

Legally, the Plaintiffs in this case can only depose Jobs if they can prove that he possesses information that is not available from other sources. Apple maintains that Jobs does not have “unique or superior” knowledge with respect to any relevant issue.

In a memo filed on January 18, 2011, Apple’s legal team wrote:

Unable to show that the testimony of Apple’s other witnesses was inadequate, Plaintiffs sifted through the more than one million pages of documents Apple produced in discovery and could point to only a small handful of documents – two articles by PC World and the Associated Press, five emails, and an essay entitled “Thoughts on Music” by Mr. Jobs – as putative support for their theory that Mr. Jobs “was likely the architect of the exclusionary policies that are at issue.” A review of these documents reveals that Plaintiffs have mischaracterized Mr. Jobs’ involvement in any relevant conduct. Plaintiffs inability to identify any meaningful evidence after six years of litigation rebuts their sweeping characterizations of Mr. Jobs as “central” to this case.

So again, it’s not that Apple is disputing that Jobs was aware of the dynamics behind Apple’s FairPlay strategy, it’s asserting that Plaintiffs can just as easily derive the information they’re looking for from other Apple executives. Jobs, Apple argues, should therefore be exempt. Indeed, the law provides legal protection for high-ranking corporate executives in such scenarios with what is known as the Apex deposition doctrine. The impetus behind the Apex doctrine was to prevent opposing parties from conducting aggressive and perhaps uncomfortable depositions as a means to “extort settlement, and to elicit testimony from a high-ranking officer which is not particularly relevant to the matters at issue.”

Apple also maintains that its refusal to license FairPlay to RealNetworks is not relevant to Plaintiffs original claims of anti-trust behavior. The Court, however, disagrees and for reasons that might become more clear as this case moves forwards, maintains that Jobs possesses unique knowledge about Apple’s DRM strategy and its reluctance to license its proprietary DRM technology.