Apple comes to a Creative settlement in legal row

24 Aug 2006

Apple has settled its legal disputes with Creative Technology, paying out US$100m in the process.

The iPod maker will pay the fee in return for a licence to use Creative’s recently awarded patent in all Apple products. However, Apple will be able to recoup some of this payment if Creative licenses this patent to other manufacturers.

The companies also announced that Creative has joined Apple’s ‘Made for iPod’ scheme and will be introducing its own iPod-compatible accessories later this year.

The dispute originally stemmed from Creative’s decision to sue Apple earlier this year for what it claimed was an infringement of technology used in its Zen music player, a rival to the popular iPod. Creative’s patent covers the way users can select music tracks on a portable media player, such as scrolling to a listing for an artist, then viewing a choice of albums and picking a song from one of those. Apple subsequently launched a countersuit, alleging patent infringement by Creative.

Apple CEO Steve Jobs said in a statement that Creative was “very fortunate to have been granted this early patent”. He added that the settlement resolves all of the differences between the two companies, including five lawsuits that had been pending.

Sim Wong Hoo, chairman and CEO of Creative, said the settlement was an amicable one and that it would open up “significant new opportunities” for Creative. “Apple has built a huge ecosystem for its iPod and with our upcoming participation in the Made for iPod programme we are very excited about this new market opportunity for our speaker systems, our just-introduced line of earphones and headphones, and our future family of X-Fi audio enhancement products.”

By Gordon Smith