No, I'm not talking about the backdated stock option chickens that are about to come home to roost. As many of you may know, I think Steve Jobs will be indicted in the Apple (AAPL) and Pixar backdating scandals. Recently, Apple lost two rounds. Steve was subpoenaed by the SEC in their civil case against Apple's former general counsel, Nancy Heinen. It's a very good idea to tell the truth to the SEC when under oath, as Martha Stewart found out, and in this case, the truth is that Steve knew about the backdating, understood the accounting implications and profited from it. As the only CEO of two companies on the SEC's bad boys list, it's hard to believe that he is going to walk, no matter how many strings Senator Feinstein pulls. The second round was the Boston Retirement Board winning some access to Apple board meeting minutes about backdating. They had to sue in California Superior Court to get it -- after all, they are only the shareholders who own the company.

However, the judge denied the heart of the retirement board's suit: Access to documents related to Apple's internal investigation into the backdating fiasco, led by Al Gore. And any documents that Apple hands over can't be disclosed to anyone else.

Apple's more immediate problem, though, is their lawsuit against Burst.com (BRST on the pink sheets). Burst is now a three-person company after spending 20 years and over $66 million with 100 employees developing and patenting ways to send digital audio and video over networks. They own a moat of patents covering delivery of video over the Internet. Microsoft tried to get around them, but couldn't, and after numerous nasty tricks that nearly broke the company, Microsoft finally paid BRST $60 million for a license. Apple's iTunes video downloads violate many of the BRST patents, but they assumed Microsoft would wipe Burst out when they started using the technology. Yet, instead of following Microsoft and settling, Apple sued to have the patents declared invalid. A big mistake, in my opinion, but not in the opinion of The New York Times, which published an article on September 20 that knocked BRST down to $1.40 for a split minute.

I really didn't expect to see it under $1.50 ever again. But the Times story reported on Apple's lawyers filing a motion to have Burst's countersuit thrown out and their patents invalidated as not novel, obvious, and having nothing to do with iTunes or QuickTime. The Times slant was this is just another little company trying to hold up a big company for ransom based on flakey patents, and the big company is about to cream them. The reporter included some pretty caustic comments from Apple's counsel. It read like an Apple public relations release.

That's just about 100% wrong. Microsoft gives away the technology that they stole from Burst and later licensed it for $60 million. Apple sells it, and Burst calculates their damages, based on over three billion iTunes downloads, at around $500 million. And Burst has been winning the battle with Apple so far. In patent lawsuits, there is a step called the "Markman claims construction ruling" that determines what the actual words in the patent do or don't mean. Burst won more than 90% of the Markman issues, and the judge who issued that ruling was actually surprised when Apple moved to dismiss the suit, which The New York Times didn't mention.

I still think that Burst.com is going to win the patent lawsuit with Apple, most likely in a very large out-of-court settlement.