apple settles suit with creative for $100m

August 23, 2006

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In the not-so-dim past (last May), technology company Creative, makers of portable media players and sound cards, filed suit against Apple Computer for “violation” of its “Zen Patent” on a user interface created “to address the challenges of convenient organization and access of songs on high-capacity portable digital media players.” Creative believes that the patent covers the interface used in Apple’s wildly successful iPod device, though the wording is vague enough to make the whole thing more than a little ridiculous (“a hierarchy using three or more successive screens on the display of the player”).

Today, however, both companies announced a settlement to the lawsuit that will see Apple paying Creative $100,000,000 USD for “a paid-up license” to use the patented technology in its products. You can very nearly taste the burning rage in Apple CEO Steve Jobs words today–“Creative is very fortunate to have been granted this early patent. This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation”–and the glee in Creative chief Sim Wong Hoo’s–“We’re very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative….We expect that the one-time licensing payment of $100 million will contribute approximately $.85 of earnings per share to our current quarter.”

As if to seal the deal, Creative has joined the “Made for iPod” accessory program and will be releasing its own line of iPod peripherals “later this year.” Are these bitter rivals finally making peace? Don’t count on it.

–D. S. W.

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