Apple Computer and Creative Technology announced Wednesday that they had amicably settled their differences. “Apple will pay $100 million to license Creative’s technology and use it in its iPods, with the opportunity to get back a portion of the fees if Creative is able to license that technology to other companies,” Ellen Lee reports for The San Francisco Chronicle. “Creative will also begin making accessories for the iPod as a member of Apple’s ‘Made for iPod’ program.”
Lee reports, “Creative said it hopes to take advantage of the iPod’s popularity by developing products for it, even though its Zen digital media player competes against it. ‘The iPod has a huge base and we’ll be able to tap into that,’ Creative Labs President Craig McHugh said in an interview. ‘It gives us an opportunity to develop products for (not only) our Zen, but (also) for the iPod.'”
Lee reports, “Analysts said the settlement removes a threat hanging over the iPod. ‘Even though it costs Apple money, it is a small amount considering the size of Apple’s iPod business,’ said Tim Bajarin, principal analyst at the research firm Creative Strategies. ‘One hundred million is not pocket change, but it’s a relatively small amount to get that out of the way.'”
“Wednesday’s settlement could help Creative strike licensing agreements with companies that might have infringed on its patents,” Lee reports. “Though McHugh did not specify other firms that use similar technology, he said Creative’s patented ability to easily find and access files is found in many high-end MP3 players and cell phones. ‘Creative can trumpet (the settlement) and say this is a serious claim,’ said Allonn Levy, an attorney with Hopkins & Carley in San Jose. ‘The fact you have a serious player and a substantial exchange of money suggest there is something to the claim.'”
Full article here.
Related article:
Apple & Creative settle: Apple pays $100M for ‘Zen’ patent, Creative plans iPod accessories – August 23, 2006