Microsoft beats Apple on patent covering iPod technology

: Apple Computer’s iconic iPod still has the huge advantage in the market — but rival Microsoft suddenly has some bragging rights in the patent office. Creating a surprise twist in the portable music wars, the U.S. Patent and Trademark Office has denied Apple’s application to patent its method of using hierarchical menus to navigate through the iPod’s contents. The basis for the denial: A similar method outlined in a Microsoft researcher’s patent application, filed after the iPod was introduced but before Apple sought its own patent.

“I’m sure there’s a certain amount of glee among Microsoft executives,” said analyst Michael Gartenberg, research director at Jupiter Research. The situation has to be “somewhat frustrating” for Apple executives, he said.

For now, the outcome is uncertain. Apple plans to appeal the ruling, and even if it’s upheld, a Microsoft official pointed out that the two companies have a tradition of licensing patented technology to one another.

But analysts said the situation could prove troublesome to Apple. The company would no doubt prefer to avoid paying royalties to its rival, especially in a field Apple pioneered.

“It’s incredibly embarrassing,” said industry analyst Rob Enderle. “That just makes it look like someone at Apple wasn’t on the ball in terms of filing the patent at the right time.” But the practical implications may be less significant. Although the Apple patent application at issue focuses on the on-screen menu, many other factors — including the device’s distinctive click wheel and its general trendiness — also have contributed to the iPod’s success.

Apple spokeswoman Natalie Kerris said the company “invented and publicly released the iPod interface before the Microsoft patent application” cited by the patent office in its ruling.

“Apple has received many patents for inventions related to iPod, and has many more patents pending,” Kerris said.

The initial rejection of Apple’s patent, and the approval of Microsoft’s patent, could make it possible for other device makers to more closely follow the on-screen design of the iPod in their own music players. Microsoft works with hardware companies, including Royal Philips Electronics, Samsung Electronics, iRiver and others who use its digital-music software.

Regardless of the outcome, Microsoft doesn’t intend to try to block Apple from the market, said David Kaefer, business development director for Microsoft’s intellectual property and licensing group. “We have a long-standing practice of licensing things to Apple and licensing Apple’s patents to use in our products,” Kaefer said. “Our...