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MP3 dispute to cost Apple Rs.464.40 crore

Posted: 25 Aug 2006     Print Version  Bookmark and Share

Keywords:Apple Computer  Creative  iPod  MP3 player  patent infringement 

The bitter dispute between Apple Computer Inc. and Singapore's Creative Technology Ltd will cost the former some Rs.464.40 crore ($100 million) as part of a broad, out-of-court settlement over MP3 technology. The two companies swapped various patent suits over MP3 technology, with Creative alleging that Apple's iPod product line infringed upon its MP3 patents.

Under the terms of the settlement, Apple will pay Rs.464.40 crore ($100 million) 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, according to the companies.

In addition, the companies announced that Creative has joined Apple's "Made for iPod" program and will be announcing their own iPod accessory products later this year.

The settlement represents the latest in a series of bad publicity—if not mishaps—at Apple. Amid its ongoing stock option investigation, Apple recently said it has discovered additional evidence of irregularities of its business practices. The company recently said that charges of forced labour at a Chinese iPod factory were unfounded, but admitted that the Longhau plant exceeded the American company's limits on hours and days worked per week.

Apple is also getting more competition in the booming MP3 sector. In a move to expand its systems business, SanDisk Corp. unveiled early this week what it claims is the world's largest capacity, flash-based MP3 player.

Despite the problems, Apple put a positive spin on the settlement. "Creative is very fortunate to have been granted this early patent," Steve Jobs, Apple's CEO, said 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."

"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, in a statement. "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."

- Mark LaPedus
EE Times

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