When Apple introduced the iPod in November 2001, the company did not file a complete provisional application until a full nine months later. In the interim, an employee from Microsoft filed a technology patent on song menu software. Apple eventually filed a complete application, but last month the U.S. Patent and Trademark office rejected the application, noting that some ideas were similar to the earlier patent filed by the Microsoft employee.

If upheld, Apple may be forced to pay iPod royalties to Microsoft (approximately $10 a machine), which could total hundreds of millions of dollars since iPods account for three of every four portable music players in the U.S. Apple says it will reject the judgment and possibly take the case to the patent office's appeal board.