Apple To Pay Creative $100 Million To Go Away

Aug 24th, 2006 | By | Category: iPods & Portable Media Players

iPod mini grayApple has agreed to pay Creative Technology $100 million dollars to settle all legal disputes between the two companies, and for a license to use Creative’s recently awarded “Zen” patent in all Apple products.US Patent 6,928,433 covers “A method, performed by software executing on the processor of a portable music playback device, that automatically files tracks according to hierarchical structure of categories to organize tracks in a logical order. A user interface is utilized to change the hierarchy, view track names, and select tracks for playback or other operations.”

Apple can recoup a portion of its payment if Creative is successful in licensing this patent to others. The companies also announced that Creative would participate in Apple’s Made for iPod program.

Creative is very fortunate to have been granted this early patent,” said Steve Jobs, Apple’s CEO. “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,” said Sim Wong Hoo, chairman and CEO of Creative.”Apple has built a huge ecosystem for its iPod and with our upcoming participation in the Made for iPod program we are very excited about this new market opportunity for our speaker systems, our just-introduced line of earphones and headphones, and our future family of X- Fi audio enhancement products,” added Hoo. “We expect that the one-time licensing payment of $100 million will contribute approximately $.85 of earnings per share to our current quarter, ending September 30, 2006.”
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