“Singapore’s Creative Technology Ltd. said Wednesday that some cellphone makers are also using its patented Zen technology without a license and that it is prepared to pursue these companies to protect Creative’s intellectual property rights,” Vladimir Guevarra reports for Dow Jones.
“‘There many MP3 player makers in the US market that are currently using the Zen technology, and there are also several cellphones that are music-enabled that are using the Zen patent,’ Craig McHugh, president of the company’s Creative Labs Inc. unit, told Dow Jones Newswires. “‘We are very open to exploring amicable solutions with any company that uses the Zen patent,’ he said in an interview. We are also ready to take the necessary steps to protect our intellectual property.'”
Guevarra reports, “The comments come after Creative last week won a $100 million settlement from Apple Computer Inc. (AAPL) over the use of the Zen technology on Apple’s popular iPod players.”
Full article here.
[Thanks to MacDailyNews Reader “Mike in Helsinki” for the heads up.]
Apple paid 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. Some say that Apple’s settlement actually strengthens Creative’s patent, which will only help Apple recoup what – to Apple – amounts to petty cash anyway.
Steve Jobs is a very smart man.
Related articles:
Apple investors cheer as Jobs wins again by getting Creative – August 24, 2006
Apple and Creative settle – the bigger picture – August 24, 2006
Analyst: Apple’s relatively small settlement with Creative removes threat hanging over iPod – August 23, 2006
Apple & Creative settle: Apple pays $100M for ‘Zen’ patent, Creative plans iPod accessories – August 23, 2006
$100 Mil is petty cash to Apple, but it’s a full year’s revenue for companies like Glaser’s. Smart move, Apple.
Things couldn’t be playing out better for Jobs on this one.
Creative, not Apple, plays bad cop on the smack down and has a $100M check to do it with, all the while, the more successful Creative is, the bigger “refund” Apple gets – just as MDN says.
Even better news is that if Creative sets a precedent in winning these disputes, it puts the Zune in more and more jepardy of having a court rule that they infring if it comes to that after Creative and MS “just can’t come to an agreement” due to the undisclosed portion of the Apple/Creative settlement.
Part of the bargain that Apple offered to Creative is that they will pay 100 million dollars in settlement and that Apple will be able to get some of that money back if Creative collects from other companies that infringes on Creative’s patent. In other words. Apple is empowering Creative to help Apple to squash it’s iPod competitors. Smart move!
Apple is on top right now, the best that can be expected of apple is to keep up with its performance and we all know that is very unlikely, competition will intense, and apple’s stock will drop to $30/share.
The iPod has competition? Intense? Keep up with 75% of market? Sounds good.
I think the real genius of Apple’s settlement is that the $100m will fund lawsuits against other also-rans whilst not enhancing Creative’s competitiveness in the slightest.
‘Creative’ has discovered the SCO business model. They’ll have as much long term success with it as SCO has.
MacDailyNews: An apology
In recent months, ourselves and regular contributors to our forums may have given readers the impression that:
(i) We all hate Creative with a vengeance
(ii) We believe that each and every product they turned out was shit
(iii) Creative should actually be wiped off the face of God’s earth for their various sins against Applekind.
We wish to make it absolutely clear that, in fact, this is all completely untrue and that we actually believe that Creative are a bunch of ‘really beezer guys’ who only have Apple’s best interests at heart and have always been operating with the intention of swelling Apple’s bank account by several million dollars.
We are happy to set the record straight.
Apple is Dooooooomed,
Not on my watch!!
creative has a much better future than apple, creative’s stock can double altho unlikely, but apple’s stock is likely to go near $30/share.
Of course they will pursue this to the end of the legal system…
That was obviously one of the keys for Apple/Creative’s deal. Apple gets off with a minimal one-time payment, allows a precedent which will help Creative pursue all the other guys, and even negotiates a commission if they succeed!
Meanwhile, in the boardroom meetings at Creative where they discuss ways to make money by actually selling products to consumers…
<crickets>
Better get them lawyers crankin…
I think it would also be within the realm of possibility that Apple quietly hopes that someone else (perhaps Microsoft) foots the bill for the Zen legal battle, and wins. I mean, let’s face it. Apple wins either way. If Creative loses the battle, and spends a lot of money and goes down in flames, Apple is fine with that.
If Creative wins and gets a license for a nice percentage of all future Zune sales… well, that’s not going to hurt either! And certainly Creative has proven that even flush with cash they are no threat to Apple. So this is a true win-win.
Once again showing how Apple really are pretty smart people.
‘Creative has a far better future than Apple’. Hmmm let me go out and start a company leaking money like a seive with no chance of making further impact in the MP3 market no matter what happens to Apple. We could all be successful in that way. Now call it success if you like but the fundamental problem is that you can’t stay in business beyond the short term no matter how good at talking it up you are and how well you have conned the banks in backing you. Of course a few facts in your argument wouldnt go a miss either as Apple by general concensus is going from strength to strength. Sure nothing lasts for ever and certainly not like wishful thinking which seems to be all that powers your demented argument.
This deal proves that creative are beginning to understand that and realise to survive a little longer the cash injection is a no brainer even if they have to use it to take moey from their actual competitors in the WMA/WMV market place. meanwhile the more the successful they are the more money Apple gets, its shear brilliance. meanwhil it gives Creative not only the muscle to fight those competitors but time to formulate an exit stategy and different products to make real money from. For Apple this is more impact per buck than advertising while keeping it away from the lottery of the Courts which as SCO have found can have a short and medium term impact no matter how dodgy their actual case on others.
Interesting though if Creative can use an exixting menu structure patent it for music related menus and expect this to be defendable against phones rather than just MP3 players how come it doesn’t apply to laptop computers playing music, or arn’t they deemed ‘mobile’. This whole ‘mobile aspect’ of an existing menu structure seems rediculous to me.
blucaso,
What future Zune sales?
The licensing amount derived from a failed product = $0.
The problem with this though is that it’s lending more credence to a stupid patent.
Hierarchical menus as a patentable idea is just amazingly stupid.
Sure this may help Apple in the short and medium term, but in the long run, it’s everyone that’s getting screwed by a patent system run amok.
What happens if the patent is invalidated in the future? Does Apple get its 100 million back?
Apple should’ve given Creative $500 million.
Hey, Dirty Pierre: what has given you the idea that we like Creative now? They are still just as much a worth piece-o’-crap company as they were before the agreement. Jobs has simply learned how to throw this crap at his competitors.
Apple should not have paid Creative since the interface layout is identical to the column view in NeXT and OS X.
What a crock of crap.
Sim Woo’s got a chubby right about now.
“Apple is on top right now, the best that can be expected of apple is to keep up with its performance and we all know that is very unlikely, competition will intense, and apple’s stock will drop to $30/share.”
So according to this logic Microsoft is already dead.
Jobs is smarter than you think. Flip back in time to the 1970’s. Anyone recall the Magnavox Odyssey home gaming system. They beat Atari to the punch and secured a patent for video game systems by only a few months. After a protracted legal battle, Atari paid them $10 Million or so, just like Apple has done, for a license. Atari then sat back and forced Magnavox to continue going to court to sue competitors. Under U.S. patent law, the licensee can require the patent-holder to sue and enforce the patent, thus protecting the licensee’s derivative rights. Magnavox virutally went out of business filing suits that only Atari benefitted from, until ultimately leaving the video game market and being acquired by Philips. Sounds oddly similar…
ALL YOUR MENUS ARE BELONG TO US!
TeamZissou: you nailed it. Thanks.
“Part of the bargain that Apple offered to Creative is that they will pay 100 million dollars in settlement and that Apple will be able to get some of that money back if Creative collects from other companies that infringes on Creative’s patent. In other words. Apple is empowering Creative to help Apple to squash it’s iPod competitors. Smart move!”
Now replace “Apple” with “Microsoft”, and you will see how ridiculously biased this statement is. Patent law is, to be blunt, effed up…. and just because this may benefit Apple doesn’t mean any of this is a good thing.