It’s tough being the little guy. Kane Kramer knows that. In 1979, Kramer came up with a brilliant idea: store music on a device using only a memory chip. This being 1979, of course, that capacity was limited: the chip would only be able to hold about three and a half minutes of music—about one song. But Kramer still went forth and patented his invention. Unfortunately, nine years later, the patents entered the public domain when he couldn’t scrape together the money for renewing the patent.
Fast forward almost two decades to 2006. Apple’s hit with a lawsuit from Burst.com, alleging that Cupertino infringes upon Burst’s patents. Burst had previously settled a similar case with Microsoft, but Apple wasn’t about to go down without a fight. So they called up Mr. Kramer and asked for his help in the Burst case. Kramer, hired as a consultant, gave a deposition about his creation of the digital music player.
The case with Burst ended up being settled last year for $10 million, but while Apple acknowledged Kramer’s part in creating the digital music player, his compensation was only that of a consultant—little relief for Kramer, who’s found himself falling on hard times.
Mr Kramer, in contrast, last year had to close his struggling furniture design business and move with his wife Lorraine and children, Jodi, nine, Luis, 14, and Lauren, 16, into rented accommodation.
‘I can’t even bring myself to buy an iPod for myself,’ he said. ‘Apple did give me one but it broke down after eight months.’
Nice. Kramer’s now in talks with Apple to get a cut of the profits the company’s made on the over 163 million devices they’ve sold since 2001. Meanwhile, Kramer’s working on a new technology that he claims will be even bigger than the iPod. In that, we wish him the best of luck.
‘Apple did give me one but it broke down after eight months.'
Nice.
Yes, I'm sure Apple planned that. Notice he didn't mention if he contacted Apple for a replacement; if he had, I'm sure it would have been replaced for free. Because Apple are such jackholes.
In the meantime, Apple owes Kramer nothing. Nada. Not a single thing. Apple was not the first company to make an MP3 player, and Kramer let his patent run out. It's his own fault. Not sure why he thinks he's entitled to a cut of Apple's profits.
If he owned a patent on something that Apple is using, that would be different. But he doesn't. Open and shut.
I'm reminded of an event Amity Shlaes recounts in The Forgotten Man: A New History of the Great Depression. Andrew Mellon got fabulously rich finding people with good ideas but no money. He provided all the money they needed in exchange for half the profits.
In one case, an investment wasn't becoming profitable as fast as expected, and the contract had a clause that allowed Mellon to take over the company. Expecting to loose everything, the worried inventor/developer called his Mellon contact. That contact told him not to worry, that Mellon knew his idea would eventually become profitable and was willing to wait.
The inventor/developer replied that he didn't understand. Mellon didn't have to be content with half the profits. He now had a legal right to take over the company and take all the profits. To that, the Mellon representative replied, "Mr. Mellon does not do business that way."
All too many of the libertarian-to-liberal, high tech New Rich on both coasts bear no resemblance to Arthur Mellon. They seem willing to do anything that's legal and much that isn't to make themselves even richer. They know the price of everything and the value of nothing. We all know examples
This case provides an excellent test of Steve Jobs' character. Here's someone who invented a device that, by Apple's own admission, is remarkably similar to the iPod. Will Apple go beyond the demands of the law and reward him generously for an idea that has made it rich? Soon we will know just what sort of man Jobs is..
--Michael W. Perry, Inkling Books, Seattle
‘Apple did give me one but it broke down after eight months.'
iPods have a 1 year warrantee. Why didn't he just hop over to his nearest Apple store and get a replacement for free?
Perhaps Microsoft can use this in their next commercial.
Seinfeld leans over conspiratorially and whispers to Gates - "You know it was Kramer who actually invented the iPod. And all he got out of it was a free iPod"
It's so close to the "hot coffee" episode where Jackie Chiles sues for millions but Kramer settles for free coffee for life.
spooky!