Creative explores new way to beat Apple iPod: patent litigation

“While it struggles to compete with Apple in the marketplace, Creative is exploring a new avenue for dethroning the digital music king: patent litigation. Creative announced Tuesday it had been granted a patent covering the user interface for portable media players, including the iPod,” Nate Mook reports for BetaNews. “Specifically, the patent involves the method for selecting at least one track on a portable player as a user sequentially browses through a hierarchy of three or more screens on the display. For example, the patent would cover a user navigating from an artist, to a list of albums, to a list of songs on an album.”

“The so-called ‘Zen Patent’ was filed on January 5, 2001 and awarded August 9, 2005. The interface referenced in the patent was used in Creative’s NOMAD Jukebox, which debuted in September 2000. Creative points out that the iPod did not ship for another 13 months,” Mook reports. “Although Creative did not say whether it planned to ask Apple to license the Zen Patent and pay a fee for each iPod sold, company CEO Sim Wong Hoo hinted that Creative would protect its work. ‘Before this invention, there was no intuitive and efficient way to deal with the large number of tracks that could be stored on a high-capacity player,’ noted Hoo. Hoo also took the time to point out that Apple’s patent application for the iPod interface was not filed until October 28, 2002.”

Full article here.

The following is a press release from Creative Technology Ltd.:
Singapore – August 30, 2005 – Creative Technology Ltd. (NASDAQ: CREAF), a worldwide leader in digital entertainment products, today announced that it has been awarded U.S. Patent 6,928,433, which Creative is referring to as the “Zen Patent.”

The Zen Patent was awarded to Creative for its invention of the user interface for portable media players, including many of the Creative Zen and NOMAD Jukebox MP3 players, and found in some competing players, such as the Apple iPod and iPod mini.

The Zen Patent covers the user interface that enables users of portable media players to efficiently and intuitively navigate among and select tracks on the players. Creative applied for the Zen Patent on January 5, 2001 and it was awarded on August 9, 2005.

Creative’s invention for the user interface for portable media players enables selection of at least one track in a portable media player as a user sequentially navigates through a hierarchy using three or more successive screens on the display of the player. One example would be the sequence of screens that could display artists, then albums, and then tracks. When the user selects an artist, the player displays a list of albums for that artist. Selection of one of the listed albums then displays a list of tracks on the album.

“The user interface covered by the Zen Patent was invented by Creative research and development engineers in our Advanced Technology Center in Scotts Valley, California,” said Sim Wong Hoo, chairman and CEO of Creative.

“The first portable media player based upon the user interface covered in our Zen Patent was our NOMAD Jukebox MP3 player. We shipped the NOMAD Jukebox to U.S. retail customers in September of 2000, and by November of 2000, it was already ranked as the top revenue-generating product in the U.S. in the digital audio player category, according to PC Data.

“By January of 2001, we announced that we had already sold 100,000 NOMAD Jukeboxes. The Apple iPod was only announced in October 2001, 13 months after we had been shipping the NOMAD Jukebox based upon the user interface covered by our Zen Patent.” “I am very excited that we were awarded the Zen Patent, which helps to protect our invention and recognizes our innovation in portable media players,” said Sim.

“After a major investment of time and effort by a group of our research and development engineers, we developed a way for a user to efficiently and intuitively navigate and select tracks from a significant number of tracks stored on a player. Before this invention, there was no intuitive and efficient way to deal with the large number of tracks that could be stored on a highcapacity player.”

“There has been press coverage recently regarding the rejection of Apple’s patent application, published as Pub. No. U.S. 2004/0055446 for a user interface in a multimedia player. This Apple patent application was filed on October 28, 2002. A related provisional application was filed by Apple on July 30, 2002, eighteen months after our filing date for the Zen Patent and over twenty months after our NOMAD Jukebox based upon our user interface was on the market,” added Sim.

“We continue to innovate in digital media players with the introduction of the Zen Vision, which adds high-quality video playback to its MP3 music and digital photo viewing features.

The Zen Vision, as well as the upcoming Zen Micro Photo with a color OLED screen and many more new products, will be based upon the user interface covered by the Zen Patent,” noted Sim.

United States Patent #6,928,433 here.
Can’t compete? Litigate. Sim’s mention of press coverage of Apple’s “patent rejection” in his press release reads like a threat to us. Creative Technology’s market cap is currently US$667.73 million. Apple Computer’s market cap is currently $38.64 billion. Apple has approximately $9.3 billion in liquid assets on hand and is a debt-free company. Could Apple simply buy Creative?

Related articles:
Microsoft has not, repeat not, patented Apple’s iPod – August 17, 2005
Beleaguered Creative Technology’s ‘war’ on Apple iPod not faring well – August 15, 2005
Microsoft to allow Apple to license iPod patent? – August 15, 2005
The real story on Microsoft’s ‘Apple iPod’ playlist patent – August 12, 2005
Patent lawyer: Microsoft and Apple iPod patent saga is much ado about nothing – August 12, 2005
Microsoft beats Apple in iPod patent race? – August 11, 2005
Microsoft researcher involved in rejected Apple iPod patent – August 10, 2005
Apple’s patent application for Pod’s menu-based software interface rejected – August 09, 2005
Apple’s iPod shine dims beleaguered Creative Technology’s outlook – August 08, 2005
Microsoft not buying stake in Creative Technology – August 02, 2005
Creative CEO Sim Wong Hoo adds fronts to war against Apple iPod – August 01, 2005
Analyst: Microsoft could buy Creative Technlogy in bid to compete with Apple iPod – July 14, 2005
Beleaguered Creative CEO Sim Wong Hoo ‘optimistic’ the company will survive ‘MP3 war’ – July 01, 2005
Beleaguered Creative may have to write off unsold stock as losses loom – June 28, 2005
Creative Tech’s reduced outlook drags on Apple, PortalPlayer, SigmaTel – June 27, 2005
Creative Tech cuts sales outlook, drags Apple down in early trading – June 27, 2005
Apple passed 20 million iPods sold milestone in early June – June 24, 2005
Apple’s understanding of what really counts makes iPod+iTunes impossible to beat – June 22, 2005
Creative Technology shares slide to lowest mark in almost two years – May 18, 2005
Apple squeezes and Creative’s profit plunges 72-percent – April 23, 2005
Apple iPod pressure forces Creative to drop prices on music players – March 01, 2005
Creative’s self-declared ‘MP3 player war’ against Apple isn’t going very well – January 20, 2005
Creative CEO: Apple iPod shuffle ‘a big let-down, worse than the cheapest Chinese player’ – January 12, 2005
Creative declares ‘war’ on Apple iPod, shoots for 40% market share of MP3 players – December 21, 2004
Creative Technology declares ‘MP3 War’ against market-dominating Apple iPod – November 17, 2004
Mossberg: Dell, Rio, Creative ‘iPod mini killers’ lag badly behind Apple iPod mini – October 27, 2004
Creative pushes to become ‘Pepsi’ to Apple’s ‘Coke’ in digital music player market – August 07, 2004

57 Comments

  1. Apple buy Creative, smart move? No, but it would allow Apple to not worry about their crap with the patent. Maybe Apple could buy the patent for a couple billion and shut Creative up, and allow them to use the patent royalty-free. Apple becomes the patent holder.

  2. hammer, we have been here before I think. We all know you invented the finger, but I invented the hand, without which the finger would be useless.

    Please get your facts straight before you waste another $5 using your finger (my royalty fee for hand invention).

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  3. But it’s OK for Apple to submit a similar patent (which obstensively be enforced against others)?

    Creative did sumbit the patent and have working prior art long before Apple’s iPod. And the patent has very recently been granted. Tough to protect a patent which hasn’t been granted yet (for those wondering why it took so long for Creative to go this route).

    That said, Creative obviously has it’s back against the wall with the MP3 player business. Much like Apple 20 years ago, it’s squandered it’s first-to-market advantage to a more able competitor.

  4. While buying Creative might make this little problem go away (and get rid of the second place market leader – at least I imagine they are) there are likely two sticky issues: 1) would the acquisition be allowed (anti-competitive and all) and 2) if it were allowed, I would imagine MS would jump in and offer more. The odd thing is, even if Apple had to license this patent (and the MS one) and have to charge more, they would probably still sell more than Creative – kind of sad for Creative really.

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