OAKLAND, Calif. — Top Apple executives were on the witness stand Thursday contesting class-action lawyers' contentions that the company's copy-protection scheme was anti-competitive and illegal.

It was the third day of testimony in a long-running antitrust class-action suit that has finally headed to a trial. Plaintiffs representing a class of resellers and consumers say Apple's digital rights management (DRM) shut out competitors and illegally raised prices.

First up was iTunes chief Eddy Cue, who repeatedly pointed out that Apple didn't want DRM on its music at all. But big record labels wouldn't participate in an online music marketplace unless DRM was present, he said.

In 2007, then-CEO Steve Jobs published his "Thoughts on Music" essay. The essay was meant as a response to the press and Apple's competitors, who had begun making some of the same claims at issue in this lawsuit: that Apple's DRM was meant to deter consumers from switching away from iPods, producing "lock-in" and market dominance.

"They were saying we wanted this closed environment, but we had wanted DRM-free from day one," said Cue. "We had the best jukebox, we had the best store, and we had the best player. With DRM-free, we'd sell even more."

At the major labels, Jobs' anti-DRM essay fell on deaf ears. "That argument is without logic and merit," said Edgar Bronfman, then-CEO of Warner Music, in an interview shown to the jurors. "We will not abandon DRM."

Defense lawyers also showed an internal Apple e-mail in which Cue had praised a 2005 article by Tim Lee, "The Recording Industry's New Clothes." (Lee later became a writer for Ars.) The article criticizes recording labels for using DRM that "treat[s] your most honest customers like criminals."

"This is dead on," Cue wrote in an e-mail forwarding the article to colleagues.

Bonny Sweeney, a lawyer representing the class of consumers and re-sellers suing Apple, asked questions suggesting that Apple's DRM could have, and should have, been inter-operable with other systems.

At the end of his testimony, Cue answered a written question from the jury. (Allowing jurors to ask questions of witnesses is not a typical procedure, but it is one allowed by US District Judge Yvonne Gonzalez Rogers, who is overseeing this trial.) The question read: "Why exactly is interoperability not possible or reliable when working with DRM-protected music?"

"Our DRM is about secrets," Cue replied. "You're trying to protect these files that no one else can figure out. You have to figure out technically, how to make things difficult to reverse-engineer, or to strip. If you really want to make it interoperable, you have to turn over those secrets to somebody else."

Record exec is little aid for plaintiffs

Next on the stand was Amanda Marks, head of Universal Music's eLabs, who negotiated deals with iTunes and worked frequently with Cue.

Plaintiffs' lawyer Patrick Coughlin tried to elicit testimony suggesting that Apple had a special animus against interoperability without much success.

Marks did acknowledge the label would have preferred different types of DRM work together. "The two primary DRM systems are Windows and Apple," she said. "It's sort of like getting two porcupines to dance together."

"So, Apple said they wouldn't do it?" Coughlin asked.

"I don't remember either party being particularly helpful," Marks answered.

"Harmony had DRM, with interoperability. You liked that, yes?"

"I don't think I would characterize it that way," said Marks. "I can say we wanted interoperability. I think it was somewhat controversial, how they [Real] achieved it."

Coughlin asked if the reason the label wouldn't go DRM-free with Apple, even though it had with Amazon, Wal-Mart, and others, was because "they didn't have interoperability with anyone else."

Marks said that DRM wasn't the reason for that. "The discussions were complicated, and I was not directly involved."

On cross-exam, Apple's lawyer Bill Isaacson pushed home the point that Marks and her company had essentially accepted Apple's argument that interoperability caused DRM to be insecure and allowed hackers to break the DRM.

"If Harmony was using a hole in FairPlay security, Universal wouldn't want people like DVD Jon exploiting those same holes, right?" asked Isaacson.

Marks agreed.

Interoperability

Apple's VP of marketing, Phil Schiller, took the stand as the last witness of the day.

"iPod's DRM-protected songs weren't compatible with any player other than iPod?" asked plaintiffs' lawyer Sweeney.

"I believe that's correct," Schiller said.

She asked questions making the point that other Apple products were inter-operable.

"With a product called QuickTime, in that market you wanted the product to be used by different vendors."

"I wouldn't call it a market," Schiller. "It was a media architecture that came with OS X 8 and 9. And it was also available for Windows download. So, we competed with Microsoft on that."

"Isn't it true that depending on where you sit in the industry, you'll have a different point of view on interoperability?" asked Sweeney.

"I don't know about that," answered Schiller. "I always think about the customer. Sometimes interoperability makes for a better product, sometimes a worse product."

"Isn't it true that if you're dominant, it's better to build a walled garden and keep others out of your walled garden?"

Schiller wasn't going to play along with that metaphor. "If you put the customer first you can meet their needs," he said. "That's how I approach it."

On cross-exam, Isaacson asked Schiller why Apple developed its own DRM.

"We needed a solution that was simple to use, that would be wildly popular with all ages. There was no system available to us that let us do everything we wanted, reliably. So we created that."

The Internet was still taking off when the iPod was launched in 2001, he noted. "It brought with it problems with security, viruses, and trojans," Schiller said. "We didn't want iPod to be like that. It had to be dependable. You don't worry every day if someone has infected your refrigerator."

"Did Apple have a strategy for 'locking in' customers for purposes of pricing?"

"Not at all," answered Schiller.

"Did you ever talk at pricing meetings about 'lock-in'?"

"It never came up."

Microsoft had tried interoperability with its system called PlaysForSure, which ran on many different products. It faltered in the marketplace, and Microsoft switched to an integrated DRM system for its Zune players.

"I saw this as validation from Microsoft that we were doing it the right way for our customers," said Schiller.

Responsibility

Finally, Sweeney came back for a second round against Schiller. Her questions were more pointed.

"Mr. Jobs said if you own your own music, legally, you should be able to play on any device you want," she said. "Don't you think that?"

"I think that's an overly general statement," Schiller said. "I don't buy a VHS movie thinking it can play in a DVD player. I've had to buy the same movie over and over again in different formats."

"Isn't it true that you could have made a seamless system and still given users the choice to buy from different vendors?"

"Not to my knowledge," said Schiller. "In the team's experience, that wouldn't be feasible or work well. The other examples in the industry didn't work well."

"You're taking responsibility from the consumer, so the consumer can't make that choice?"

"No. That's not how I look at it, at all."

"So the consumer can't play the songs on the iPod, that's just the consumer's mistake?"

That led into Schiller attacking the Real system, which mimicked Apple's FairPlay DRM. It was the clearest statement yet of Apple's view of the system—that it was nothing more than a hack attack, a corporate version of "DVD John."

Real knowingly created a method to work around Apple's rights management system," said Schiller. He continued:

They sold music to customers knowing they had done that without any SDK, without any license. They did that knowing that it may not keep working for the customer. It's Real who should have taken responsibility for selling a system that's reliable, for the long term. They knowingly didn't do that. I really think if you want to talk about responsibility—the responsibility to develop a system that works like the consumer expects—that's Real's responsibility. We made something that worked reliably. We had no responsibility for what Real was doing. They did that on their own. I think they're the ones who ultimately let customers down, with the product they created.

Sweeney's final question was about the other example of interoperability they've been holding up besides Real, a startup that never really took off.

"Are you familiar with Navio?" she asked.

Schiller hadn't heard of it.