Real Networks bravely introduces a new song format that protects the intellectual property rights of the copyright holder but still permits the song to be played on a variety of platforms, including the ubiquitous iPod. Apple had refused to license the song recording format to Real, but Real plunged ahead without a license.
Real's lawyers must have been working overtime to figure out a way to do this and stay out of the way of Apple's lawyers. Some thoughts:
First, Real itself can say it isn't copying anything, so it isn't engaging in copyright infringement. Any of the format that it uses are only functional elements of software, and thus unprotectible by copyright. However, there is the contributory infringement claim that may still be available if Apple is offended by this action. Apple's success on this claim might turn in part on whether Real permits a user to convert an iTunes song to an alternate song format in a way that exceeds the original permission given to the user by iTunes.
Second, Real can argue that the DMCA permits circumvention of a copyright protection technology for reverse engineering for interoperability.
Third, there is the possibility of being caught up by contracts--either involving iTunes songs or the iPod itself. These may prohibit reverse engineering--thus creating a ground for liability of Real--or may prohibit playing iTunes format songs on anything other than iTunes itself. A quick search didn't turn up those terms, but I didn't check all possible places for such contractual provisions to turn up.
All in all, I think this is a positive development. Kudos to Real.