Apple acquired Beats Electronics and Beats Music for $3 billion in May. Out of the $3 billion, $2.6 are in cash and $400 million in stock. The acquisition is expected to be completed in the next quarter. Apple was interested in the popular and expensive headphones, as well as in the newly emerged music streaming service. Beats Music, the music streaming service launched in January, already has a 250.000 subscriber base. Tim Cook, Apple CEO, said he was more interested in the people behind the technology, than in the technology itself, according to Financial Times.
Because Bose sues Beats for infringing patents covering the noise cancelling technology, now Apple will have to deal with the newly emerged problems of Beats Electronics. Bose, established in 1964, recounts in the filling how the MIT professor Amar Bose started working on the noise cancelling technology back in the 1970s after a very noisy flight. Bose complains legally that “at least 36 U.S. patents and applications,” have been infringed, out of which 14 applications are currently being reviewed. Bose decided to pick a patent fight with Bose over five of the infringements: “Dynamically configurable ANR filter block topology”, “Dynamically configurable ANR signal processing topology”, “Method and apparatus for minimizing latency in digital signal processing systems”, “Digital high frequency phase compensation”, “High frequency compensating”, according to Priorsmart.com. Beats “Studio” and “Studio Wireless” are among the products falling in the area of Bose’s interest.
Bose sues Beats, but Apple has plenty of experience in the court room
Apple already possesses an impressive experience in regards to intellectual property rights law suits, so the Cupertino-based company might display agility during the whole affair. Apple had net cash and equivalents of $165 billion at the end of the second quarter.
Although Bose will not comment the ongoing litigation, Carolyn Cinotti, Bose public relations director, released one brief statement covering the issue. “We can share that for over 30 years, Bose has made significant investments in the research, development, engineering and design of the proprietary technologies found in our headphones. Bose’s patented technologies enable the exclusive performance found in our QuietComfort Acoustic Noise Cancelling headphones. We are committed to protecting our investment, protecting our customers, and defending the patents we own.” As Bose sues Beats, we will see what kind of casualties the headphone war between sound quality versus style will produce.