Apple Pays $100 Million Settlement Over iPod Patent Infringement

You may have thought Apple created that iPod you're listening to and has used its marketing muscle to make it the number one MP3 player in the world.
Well, you'd be right about the latter and potentially wrong about the former.

The computer pioneer has agreed to pay one of its arch rivals, Creative Technology Ltd., $100 million to resolve five patent suits centering on the famous music device.

The issue wasn't exactly the player itself but the navigation system used to select songs played on the machine. Creative sued Apple in May, claiming it had patented the technology for its Zen players long before Apple came out with a similar system in its iPod.

Apple countersued, arguing its competitor stole several patents about editing data on a portable device.

The entire expensive legal mess was eventually taken to the U.S. International Trade Commission, which agreed to examine Creative's claims.

And that's when Apple decided it couldn't take any more chances. If the agency ruled in Creative's favour, the effects could have been devastating - there was a chance all iPods, which are made overseas, could have been prevented from entering the U.S. market.

That prospect - and the fact that hashing it out in court could have cost the company "tens if not hundreds of millions of dollars" according to one Apple spokesperson - was the impetus for the settlement.

Both sides have agreed to drop all claims against the other.

But it's clear that the computer company's fiery creator isn't completely happy about the deal.

"Creative is very fortunate to have been granted this early patent," Apple C.E.O. Steve Jobs notes 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."

It's clear who has the most to lose. While Creative is the world's second largest manufacturer of MP3 players, no one comes close to the iPod's incredible market dominance. It's estimated 70 percent of North America's MP3 players originate with Apple.

"A settlement doesn't mean anyone's right or wrong," suggests patent attorney Michael Kroll. "In general it's just the cheapest way to get on with life. You do what's best at the time. I'm sure that's what Apple was thinking."

But getting your fiercest rival to pay up has to be music to Creative's ears.

http://www.citynews.ca/news/news_3004.aspx

As a consumer, what do I think?
After reading this story, I now picture Creative as a sore loser, who despites Apple for owning property to the number 1 MP3 player in the world for three years running. You know, it would have been credible had you earned this $100 million from product sales, but I'm sure hiring corporate lawyers to study and find holes in Apple's constitution, patent history, and trademark listings is way more sensible. Yep. It's much better to be listed on someone's blog as a "Sore Loser" rather than a "Success Story." Plus, now that you have $100 million in your pocket, I guess you don't really need us consumers to buy your product. I think you have enough revenue to just cover your losses. Maybe you'll break even. Who knows, this could be the year!

Whatever.

And another thing - if iPod did infact "steal" your technology, at least they did it for something good! If you kept the technology to yourself, it would've been wasted - just like the money you spent on your enginnering department.