Real Network's decision last year to make it possible to play music cuts downloaded from its Rhapsody online music service on Apple's iPod through a technology called Harmony puts it in jeopardy of a possible lawsuit from Apple Computer it might not be able to win, a company government filing said.

Macworld UK reported that in its latest Securities and Exchange Commission filing, Real warned investors that possible litigation by Apple could cost the company millions in legal fees and affect its future operating results and that its Harmony technology may be undermined.

""If Apple decides to commence litigation against us in order to prevent interoperation with its products, we may be forced to spend money defending their legal challenge, which could harm our operating results," the filing states.

The filing admits that "Apple will continue to modify its technology to 'break' the interoperability that Harmony provides to consumers," as it did last year just months after Real released Harmony. But the report goes on to say, "if Apple chooses to continue this course of action, Harmony may no longer work with Apple's products, which could harm our business and reputation, or we may be forced to incur additional development costs to refine Harmony to make it interoperate again."

Real defended its actions by saying, "we believe our Harmony technology is legal," but admitted "there is no assurance that a court would agree with our position."