Apple And Creative Unveil Settlement

by Glen Shapiro, LawAndTax-News.com

25 August 2006

Apple Computer and Creative Technology, Ltd. on Wednesday announced a broad settlement ending all legal disputes between the two companies.

Creative in May filed a complaint with the International Trade Commission, requesting that the ITC institute an investigation into whether Apple Computer Inc had violated the 1930 Tariff Act by importing and selling iPods and iPod Nanos that infringe US Patent 6,928,433, which the firm refers to as the 'ZEN' Patent.

According to Creative, the so-called ZEN Patent was applied for on January 5, 2001 and was granted to it on August 9, 2005.

It covers the user interface that enables users of portable media players to "efficiently and intuitively" navigate among and select tracks on the players.

Creative also filed a lawsuit earlier this year against Apple in the United States District Court for the Northern District of California seeking an injunction and increased damages for Apple's 'willful' infringement of the ZEN Patent.

Under the terms of the agreement reached this week, Apple will pay Creative $100 million for a paid-up license to use Creative's recently awarded patent in all Apple products. Apple can recoup a portion of its payment if Creative is successful in licensing this patent to others.

Steve Jobs, Apple's CEO announced that:

"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."

“We’re very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative,” added Sim Wong Hoo, chairman and CEO of Creative.

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