Apple will fight to secure the patent on the menu-based software interface of its iPod.
This follows the US Patent Office's decision to award the patent to a Microsoft researcher.
This has led to much speculation that Apple will now have to pay Microsoft a royalty on each iPod sold, though Microsoft's director or intellectual property dismissed such thoughts as "a bit premature" last week.
The Patent Office decision was based on the fact that Microsoft filed for the patent five months before Apple did.
Despite the setback, the case isn't cut and dried. Patent attorney John Ferrell told Associated Press that Apple can file a declaration that states it invented the technology before Microsoft filed the patent. The fact that the company had iPods using such technology available on the market before either patent was filed should support this.
A recent Apple statement on the matter suggests this will be the company's chosen strategy: "Apple invented and publicly released the iPod interface before the Microsoft patent application was filed," it says.
Apple could also alter its patent application so is does not "overlap" Microsoft's, Ferrell explained. He did warn that the final decision could take at least another six months.
There may be little need to worry, as both companies have a tradition of sharing technology, following their historical 1997 agreement to do so for five years.
An analyst told Associated Press he thought it unlikely Apple will have to pay a royalty to Microsoft.