Apple said on Wednesday it will pay $100 million to Creative Technology Ltd. to settle all patent litigation over Apple's popular iPod music player.
The agreement gives Apple a license to use a Creative patent in its music player
and other products and settles all legal disputes between the two companies, Apple
Apple Chief Executive Steve Jobs said the agreement ends five lawsuits between the
companies "and removes the uncertainty and distraction of prolonged litigation."
"Creative is very fortunate to have been granted this early patent," Jobs added.
Creative, the world's second-largest maker of MP3 music players, sued Apple in May
alleging the Cupertino, California-based computer maker had infringed a patent on
its "Zen" player.
Creative's patent covers the way music tracks are selected on a device using a
hierarchy of three or more successive screens. On the iPod, for instance, users
can scroll from artists to albums to songs.
Apple in June countersued, while Creative took the case to the U.S. International
Trade Commission and sought a permanent cease-and-desist order against Apple.
Apple in one countersuit alleged that Creative had infringed at least three of its
patents, including one for editing data using a portable media device.
Jobs said the settlement "resolves all of our differences with Creative."
Apple spokeswoman Katie Cotton said: "We want to move beyond the legal issues and
get back to innovating," adding that the cost of litigation could have risen to
"tens if not hundreds of millions of dollars."
Creative said it would take part in the "Made for iPod" program and was "very
excited about this new market opportunity" for its speaker systems, recently
introduced line of earphones and headphones, and a future line-up of X-Fi audio
Apple has more than 70 percent of the U.S. market for digital music players.
Apple's latest version of the iPod holds audio, photo and video files and starts
at $299. Creative's Zen Vision:M can play audio and video files and lists for
about $300, though many retailers offer discounts.
des Apple, Creative competes with Samsung Electronics, which makes the
Yepp player, Japan's Sony Corp. and South Korea's Reigncom Ltd., maker of iRiver