Apple may be forced to pay royalties to Microsoft for every iPod it sells after it emerged over the weekend that Microsoft beat Apple in the race to file a crucial patent on technology used in its iPod. The total bill could run into the hundreds of millions of dollars.
Although Apple introduced the iPod in November 2001, it did not file a provisional patent application until July 2002, and a full application was filed only in October that year.
However it appears that the boys in Seattle pipped them to the punch by submitting an application in May 2002 to patent some key elements of music players, including song menu software.
In July, the US Patent and Trademark Office rejected Apple's application, saying some ideas were similar to an earlier application filed by a Microsoft employee, John Platt.
The dispute, which emerged last week could lead to Apple having to pay a licence fee for the technology of up to $10 a machine.