Did Steve Jobs STEAL the idea for iTunes? Inventor claims tech giant stole idea for music sharing service after he pitched it to them in 1993

• e-mail

An inventor and his business partner claim that Apple stole their idea for a music and video sharing service.

Scott Sander and Arthur Hair, co-founders of SightSound Technologies, have been locked in a David and Goliath battle with the tech giant since iTunes first launched in 2003.

The launch of the billion-dollar service, came a decade after Hair was granted a patent for the electronic sale of digital audio and video recordings in 1993.

Scroll down for video 

Scott Sander (left) and Arthur Hair, (right) co-founders of SightSound Technologies, have been locked in a David and Goliath battle with the tech giant since iTunes first launched in 2003

Sanders, in a lengthy editorial in Medium, claims that Apple ripped off their idea after they pitched it to the company in the late 1990s.

Despite attempts to take the computing and tech firm to court, Sander says that he and Hair have been left with almost nothing while Apple have made billions off their idea.

It all began back in the mid-1980s when Sander's business partner and inventor Arthur Hair imagined a future where consumers could download a movie without having to leave their home, or have access to the entire music back catalog.

Hair was granted a patent for the electronic sale of digital audio and video recordings in 1993.

Despite a lack of interest from the music and movie industries, the pair plowed ahead and SightSound become the first company to ever sell a music download via the internet in 1995.

Four years later, the firm became the first to electronically sell a movie download via the internet - director Darren Aronofsky's award- winning Pi - and in 2001 they became the first to sell a film into a mobile device - a handheld Pocket PC.

But the entrepreneurs were never rewarded for their pioneering, visionary technology.

Sanders claims they pitched their idea for a music sharing service, and portable computer device to Steve Jobs. Apple later launched their own verions

Instead, Sander claims they were ripped off by the big players in the industry; Napster, German media conglomerate Bertelsmann, and, of course, Apple.

SightSound won victories against both Napster and Berelsmann after the courts upheld Hair's patent.

But Sander says that, 23 years after his partner was granted the patent, they are still fighting Apple over iTunes which has around 575 million users and made an estimated in $6.9 billion in 2013.

The former head of Apple, Steve Jobs, once famously said: 'We have, always, you know, been shameless about stealing great ideas.' 

The founder of SightSound says the company had first got in touch with Apple back in 1993.

Hair had just been granted the patent for his revolutionary idea to sell music and movies electronically on the internet - in a time when many people did not own their own computer and the floppy disk still ruled.

Music lovers would visit their favorite music store to pick up their favorite band's new album and families would take a trip to their local video store to watch a movie.

The inventor came up with the concept, aged 25, while at a party in 1986. His friend was showing off one of the first CD players when Hair appeared confused.

'Why would they trap digital music on hard media?' he asked, according to Sander.

''It should flow over networks,' Art said. So, with a Corona and lime in one hand and a CD in the other, Art's download obsession began.'

In that moment, Hair anticipated a seismic change in the way we consume our entertainment.

Once the patent was in hand, he simply had to persuade the companies to see it too. 

SightSound was the first to allow people to buy and download movies and music

Instead, Sander claims he and Hair were ripped off by the big players in the industry; Napster, German media conglomerate Bertelsmann, and, of course, Apple (pictured is iTunes on an iPhone 5)

'When we got our first patent back in 1993 we calculated that we needed about $22 million to build our download system,' Sander said. 'To get that kind of cash we had to find a company that understood the enormous scope of our vision and had a CEO with the balls to back it.'

On April 5, 1993, Sander and Hair sent out scored of letters to anyone they believed could be interested in their idea; movie makers, music labels, computer and tech firms, the then-dominant Microsoft and its much smaller rival Apple.

The letter, addressed to Apple CEO John Sculley, promised to 'revolutionize the video rental industry and the pre-recorded music industry' and 'serve as the catalyst to propel the multimedia industry into the 21st century.'

It went on to say the technology will have a 'very positive and far reaching impact' on the movie, music and computer industries and 'should be of interest to Apple.'

Apple were not interested.

Nor were Microsoft or the dozens and dozens of other companies that SightSound contacted.

Hair wrote to then-Apple CEO John Scully in 1993 telling him about the patent

Sander contacted Jobs in 1999 offering him the opportunity to use SightSound on their Mac operating systems

Taken back by the negative reaction, but not undeterred, they contacted music label Polygram Record - a label owned by Phillips and later taken over by Universal.

Negotiations were going well. Eric Kronfeld, President of PolyGram North America, not only understood the idea, he was blown away by it.

Sander described their pitch, the terrifying moment where they learned if their lives could change for ever, his business partner was going into 'excruciating complexity.'

'Art had a techno-genius way of describing every detail which I called 'digital turret's syndrome.' I gave Art a look that said, take a breath and see if he's still following. Art paused and asked, 'Eric, do you understand what I'm describing?'

'Eric Kronfeld reached up, pulled the cigar out of his mouth and leaned forward, elbows on the conference table, and spoke: 'Understand? I've had a hard-on under the table for the past fifteen minutes.''

Sander said he was outraged when Eddy Cue from Apple got in touch after the launch of iTunes

But the deal was not to be. 

At that time in the mid-90s, music retailers such as Tower Records, Sam Goody and Virgin megastore, all since disappeared, had a power over the labels.

When Kronfeld pitched the idea to industry executive Alain Levy, Levy summed up the problem, in one sentence: 'Eric, you naive son-of-a-bitch, the retailers will crucify us.'

With their final deal in tatters, Sander and Hairfeld decided to launch direct to the public and in 1995, SightSound negotiated the first ever deal with a band to sell their music digitally. 

The Gathering Fields' new album was sold online for $6 and singles were $1. Three years later, SightSound changed their prices to a familiar sounding $9.99 for albums and 99 cents for singles - the same pricing launched by Apple's iTunes years later.

With little success in the music industry, Sander turned his sights to the movie business.

Using a much brasher style, SightSound launched a series of adverts threatening that students and young people were going to start stealing films on an unprecedented scale if they could not access the content online, legally.

Napster were also accused of ripping off SightSound but settled litigation with the firm in 2010 (pictured is CEO of Roxio, the parent company of Napster, Chris Gorog in 2003)

Once again, they struggled to interest the bigger players on the scene but did become the first company to electronically sell a movie download via the internet, and produced Quantum Project, starring John Cleese and Stephen Dorff - the first film produced specifically for the internet.

As SightSound struggled to attract content for it's platform, their concept caught the eye of Steve Jobs who returned to Apple in 1997.

Sander said he heard rumors Jobs was furious that SightSound were only selling to computers with Microsoft - and not to Apple.

The firm received an invitation from Apple to make the service available on Mac computers.

At that time, Apple was a small rival with just a four per cent share in the market, but Hair agreed to make SightSound available on Macs if Apple agreed to changes to the operating system to 'enable the digital rights management the record labels would demand.'

Hair also wanted Apple to make a handheld portable player and even attached a graphic of what that could look like.

But when Hair and Sander went to meet Apple engineers in 1999, they were disappointed to be told that the proposals required a complete re-write of Mac's systems which would not take place any time soon.

Two years after Apple rejected the proposals, Jobs filed a 'design patent' on a portable media player in October, 2001

'Over the next several years Apple would adopt every aspect of the ecosystem that we proposed, including the development of a handheld player, which would become the iPod, and the 'entire re-write of their OS' which would become the Unix-based Mac OS X.

'They even copied the pricing structure of SightSound with the 99 cent single, Sander claimed.

Meanwhile, SightSound was struggling to make a profit as they hit the dot.com bust and struggled to provide enough content.

The firm was also fighting infringement by the multi-billion dollar Bertelsmann firm.

Patent battles have three steps, the Markman hearing to determine interpretation of the patent, Summary Judgement, where the case is tried on paper before a judge, and trial by jury to determine any disputed facts and set the damages for the infringed patent holder.

The litigation with Berteksmann lingered for four years, causing serious financial damage to SightSound as the uncertainty around their patent chipped away at their bargaining power. 

According to Dediu, the average iTunes account holder spends about $12 per year on music, and with 575 million active users, Apple's annual revenue hits $6.9 billion

Sander argues that iTunes ripped off his and Hair's idea for the music service, SightSound (pictured) 

Eventually in February 2002, the Federal Court upheld their patent in all respects in the Markman hearing.

While they waited for the next ruling in the Summary Judgement, and SightSound suffered, laying off staff and cutting back, Apple had flourished.

On April 28, 2003 - four years after Sander and Hair's pitch to Apple, iTunes music store was launched. 

Sander says that he even got a call from someone at Apple following the announcement, inviting him to come in to talk to them about SightSound.

'My reaction was simply, 'you have got to be f***ng kidding me?''

But after their second hearing in the Bertelsmann case turned up in their favor, they decided to go back to Apple.

A lawyer representing Sander, and spoke to Apple on his behalf,  

Allen & Company followed up with Eddy Cue on my behalf, said the tech firm 'exhibited a 'laissez-faire' attitude toward patents and relayed that Apple's position was simply, 'Not interested, come and get us.'

'In retrospect it seems that Apple never intended to pay SightSound for the use of our patents unless we sued.'

APPLE AND COPYRIGHT INFRINGEMENT 

SightSound are not the only company to come forward to accuse Apple of stealing their idea. Over the years, several have claimed that the tech giant have used their technology or intellectual property without giving them any compensation.

In 2014, an Australian start-up company threatened legal action, alleging Apple had stolen its HealthKit name. 

'They have used our name and launched a new product called HealthKit,' sayd Australian company co-founder Alison Hardacre.

Apple CEO Tim Cook launched the IOS 8 version of it's Apple product, and a new health app which shares the same name as Australia's HealthKit

A look at the Australian version's website welcoming vistors to its page which they say inspired Apple's name

The Australian HealthKit, launched in 2012, is designed to streamline health services by connecting health practitioners, such as doctors to clients to access health records. 

Apple's HealthKit app, launched two years later, lets users measure the body's performance when exercising, such as the heart rate, calories burned, blood sugar, cholesterol and keeps a record of that data all in one place. 

In 2010 the company settled with Cisco, a company that designs, manufactures, and sells networking equipment, over a trademark-infringement lawsuit for the use of the iPhone name.

Cisco sued the company after Apple unveiled its long-awaited multimedia phone, a name already claimed by the network equipment maker.

Apple was also embroiled in a legal stoush with Apple Corps, the music company owned by the Beatles, between 1978 and 2006 over the use of the Apple name. The two companies settled for an undisclosed price back in 2007.

The firm were even hit with a cease and desist letter by a street artist, accusing the company of not seeking permission to use a slogan he claims to own. 

Inspiring: New York-based street artist James De La Vega (pictured) is known for writing motivational messages as part of his decade-long 'Become Your Dream' graffiti series. He claims his slogan was stolen

James De La Vega, 46, is said to have filed the claim in reaction to Apple's usage of the phrase 'You're more powerful than you think' in its high-profile advertising campaign for the iPhone 5S.

The New York-based artist is known for writing motivational messages as part of his decade-long 'Become Your Dream' graffiti series, and allegedly claims the phrase Apple is using is so closely associated with his work that other companies have previously approached him to use it.

De La Vega's inspirational slogans adorn not just walls and streets in New York, but have also previously been used in a range of commercial handbags and fashion accessories.

But he said Apple deliberately adopted one of them without seeking his permission in order to motivate potential customers into buying its products, according to Barbara Ross writing in the New York Daily News. 

One of the most controversial claims - which was verified by Apple - came from a British inventor who left school at 15.

Apple have admitted that it was Kane Kramer (pictured with his invention)  who came up with the technology for their hugely popular iPod - but he says he's never received a penny from his invention.

Apple have admitted that it was Kane Kramer who came up with the technology for their hugely popular iPod - but he says he's never received a penny from his invention.

His invention, called the IXI, stored only 3.5 minutes of music on to a chip – but Mr Kramer rightly believed its capacity would improve.

His sketches at the time showed a credit-card-sized player with a rectangular screen and a central menu button to scroll through a selection of music tracks – very similar to the iPod.

He took out a worldwide patent and set up a company to develop the idea.

But in 1988, after a boardroom split, he was unable to raise the £60,000 needed to renew patents across 120 countries and the technology became public property.

Documents filed by Apple in a court case show the US firm acknowledges him as the father of the iPod. 

The computer giant even flew Mr Kramer to its Californian headquarters to give evidence in its defence during a legal wrangle with another firm, Burst.com, which claimed it held patents to technology in the iPod and deserved a cut of Apple’s £89billion profits. 

Advertisement

In the book, The Perfect Thing' By Steven Levy, Jobs explained that Apple's small market share in the 90s had been their major selling point as he was able to persuade record labels to trial licensing music online to Mac customers only - which accounted for five per cent.

Within a year, he opened up iTunes to the rest of Windows PCs.

SightSound settled litigation with Bertelsmann in early 2004 and also began proceedings against Napster for infringement - who proposed a reexamination of their patent that would take six years.

By 2010, the courts once again ruled in SightSound's favor who, in the meantime, had joined up with The General Electric Company.

They turned their attention back to Apple but in 2011, the America Invents Act was passed as a way to speed up disputes between patent holders and challengers.

But it was to have a devastating effect on Sander and Hair's fight.

The newly created Patent Trial and Appeals Board approved yet another review, requested by Apple - despite the patent passing a six-year review by Napster.

Apple brought eight points for rejection of SightSound's patent - every one of which was rejected by the board.

However, in an unprecedented move, the board raised their own grounds for rejection - a combination of the Compusonics prior art meaning that they believe the patent built upon another product - something Apple never raised.

On October 7, 2014, the board - which Sander describes as the 'death squad for patents ruled in favor of Apple. 

'The government granted patents to inventor Arthur Hair. The inventor's work then radically transformed an entire industry.

'And now, a quarter of a century later, the once proud inventor is called a troll and stripped of his property.

Sander is still fighting to have his infringement case heard. But he is less and less hopeful that it will ever reach a jury. 

'A jury may never hear me plead my case. Now you have.'

DailyMail.com has reached out to Apple for comment.