Creative had sued Apple over the use of navigation systems to
find and organise music on iPods which it said violated patents
held by Creative. Creative makes rival portable music players under
the Zen name.
In its suit, Creative had asked the International Trade
Commission to ban the importing of iPods to the US, since the
machines are made outside of the country. Apple in turn filed two
counter-infringement patent lawsuits against Creative, which is
based in Singapore.
Apple founder and chief executive Steve Jobs said that all
outstanding cases were settled by the payment. "Creative is very
fortunate to have been granted this early patent," said Jobs in a
statement. "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."
The payment is a one-off licensing fee for Creative's patented
technology. Under the terms of the deal, Creative will also be
permitted to badge some of its products as 'made for iPod' as part
of an accessories affiliation programme operated by Apple.
"This was a very broad settlement,'' Craig McHugh, president of
Creative Labs, told the San Jose Mercury News. "We have the
opportunity to now enter the iPod ecosystem and sell our
accessories such as speakers and head phones. It's wonderful. We
felt this was for the best."
Creative was the first company to market portable digital music
players but the brilliantly designed and well marketed iPods
quickly overtook Creative in sales and now dominate the market.
IPods now account for 26% of the digital music player market, while
Creative's second place still only brings them 6% of the
market.
