Microsoft owns a key patent for music player software that could force Apple to pay it a royalty for every iPod sold.
The patents cover the generation of playlists and building of music libraries in portable media players. Apple launched the iPod in November 2001, but only filed a provisional patent application in July 2002 for the menu control software.
But Microsoft developer John Platt filed his patent five months earlier and has been awarded the patent by the United States Patent and Trademark Office. Apple is appealing, stressing that the iPod was launched before Platt filed his patent claim.
Apple's iPod currently accounts for the majority of all music players sold and the revenue they generated contributed to the company's better than expected results.