An iPhone 4S on the rocks, facing a patent suit from Personal Audio. Photo by Flickr user mac_ivan, Ivan Bandura.

The day the iPhone 4S was released, patent-holding company Personal Audio LLC sued Apple for a third time, hoping the new iOS 5 software will change a judge’s opinion in its favor.

Personal Audio has already won $8 million in damages from Apple over iPods, iPads and iPhones, in a court case that wrapped up in July.  In that first suit, the Texas-based organization accused Apple of infringing two of its patents, but Apple was found to infringe only one.

Since then, Personal Audio filed another suit to obtain damages from Apple for the second patent. It has used the patent that won against Apple (for an “audio program player including a dynamic program selection controller”) to sue other major tech companies with phones and electronics with music playlists.  Personal Audio filed its third patent lawsuit against Apple on Oct. 14.

The difference in the new case?  It’s as simple as a USB cable.  The patent in question is for an “audio program distribution and playback system” that downloads playlists.  At the time, the Apple products named in the first suit had to be connected to a computer to sync playlists using iTunes, and Judge Ron Clark of the Eastern District of Texas decided Apple did not infringe the patent despite the jury having concluded otherwise.

“The USB cable did not meet [the judge’s] definition of ‘download,'” said Personal Audio lawyer Ronald J. Schutz of Robins, Kaplan, Miller & Ciresi.  “Apple argued that the USB cord turned the iPod into a dumb hard drive.”

But with the release of Apple’s new iOS 5 software, iPhones, iPods and iPads can sync playlists from iTunes over a WiFi connection instead of using a USB cable.

Both Apple and Personal Audio appealed the outcome of the first case.  Personal Audio filed a second lawsuit against Apple in August, which was stayed earlier this month (PDF) by Judge Clark pending the outcome of the first suit’s appeals.  “The court sees no reason to waste time and resources proceeding with the instant case…  It makes little sense to keep re-hashing this argument at the district court level, when the issue is now before the Federal Circuit,” Judge Clark wrote in the order to stay the second case.

James D. Logan, the founder and owner of Personal Audio, invented the patents in the suits with Charles G. Call — a patent attorney — and Daniel F. Goessling.  Logan previously founded and ran a touch-screen technology company called MicroTouch Systems from 1982 to 1996, that was purchased by 3M for $160 million in 2000.

After resigning at MicroTouch, Logan founded Personal Audio, Inc. in Methuen, Mass. to try to develop “an audio player for delivering personalized audio content based on the past listening habits or selections of an individual user” as an alternative to radio, according to the complaint in Personal Audio’s suit against Samsung and other tech companies.  In 1999, Logan founded Gotuit Media, a video metadata company in Woburn, Mass. that was purchased by Digitalsmiths in 2010.  Logan lives in Candia, New Hampshire.

Schutz said that Personal Audio tried and failed at an early attempt to develop an audio player.  “These patents go back to 1996,” he said, referring to when the audio player patents were filed.  “Jim Logan and his fellow inventors were very early in coming to this idea.  Certainly earlier than Apple.”

The patent involved in Personal Audio’s continued litigation against Apple was filed in 1996 but approved in 2009.  The company quit functioning in 1998 and now makes money as an LLC with an office in Beaumont, Texas by enforcing its patents.

Personal Audio’s patents cover transferrable music playlists and their interfaces, but as far as Schutz is concerned, the organization has the digital music player itself patented.  “This patent covers a specific product,” he said.  “An audio player that can receive or download a navigable playlist.”

In September, Personal Audio sued Samsung, Research in Motion, Motorola and HTC for their music applications and players.  It settled with defendants Colby Electronics and Archos in the original suit against Apple, and dismissed its case against Sirius XM Radio without prejudice, “so we could focus on Apple,” Schutz said.  He said Personal Audio intends to sue Sirius again.

Apple’s new iOS 5 software has already been installed on at least 1 out of 3 compatible products, according to Localytics, less than a week after being released.

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