California - A new patent that has been recently granted to Apple has the potential of locking Facebook out of a much sought after area of growth, which is using credits to acquire such "media items" as songs, videos, images, e-books, and podcasts. The definition of "digital asset" also raises questions of whether Zynga's virtual goods, the bulk of its revenue, would also fall under this patent. Zynga offers browser-based games that work as application widgets on Facebook.
Proven that it is unafraid to litigate, Cupertino, California based Apple has demonstrated that it is willing to use its patents as ammunition in the mobile computing market. For instance, its patent infringement lawsuit against Samsung in Australia has expanded to include 278 patent claims. Based on its litigious history, we can only expect that Apple will start to use its portfolio of patents to attack competitors in its widening spheres of operations.
The recently awarded patent number 8,112,360 was originally filed in May 2006 and is known as Digital Media Acquisition Using Credit. A description of the functions of the patent include, a method for acquiring a media item from an online media store using a credit, said method including at least: (a) identifying a media item from being purchased by a purchaser, the media item having a purchase cost associated therewith; (b) determining whether the media item is permitted to be acquired using an item credit, the determining being based on at least the purchase cost and a country of origin for the purchaser, wherein said determining (b) includes at least: (b1) determining a media type for the media item; and (b2) determining whether the media type is permitted to be acquired using an item credit; (c) determining whether the purchaser has at least one item credit available at the online media store; and (d) thereafter applying the item credit associated with the purchaser so as to reduce or eliminate the purchase cost of the media item when said determining (b) determines that the media item is permitted to be acquired using an item credit.
As Facebook has witnessed from both Apple and Amazon, media sales could be an important vehicle in driving growth. Many media-centered companies, such as Zynga, are interested in having access to Facebook users, however Facebook demands that Zynga or anyone else interested in using its network to trade in virtual goods must use Facebook credits to complete the transaction. Since Facebook monitors the location of where its users are connecting from, that could put any media sales directly under the new Apple patent.
Apple clearly did not file the patent with the goal of shutting Facebook out of the digital media acquisition market. After all, the patent was filed while Facebook was still in the works in a Harvard dorm room. But with the social network's explosive growth over the past five years, this may indeed become Apple's intention.