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Apple Settles Creative Lawsuit for $100 Million
E IS mC(Square) writes "CNet News reports that `Apple Computer and Creative Technology have agreed to settle their legal dispute over music player patents for $100 million, the companies announced Wednesday.
The $100 million, to be paid by Apple, grants Apple a license to a Creative patent for the hierarchical user interface used in that company's Zen music players.
The patent covers an interface that lets users navigate through a tree of expanding options, such as selecting an artist, then a particular album by that artist, then a specific song from that album. Creative filed for the patent on Jan. 5, 2001.
Apple can get back some of the $100 million payment if Creative is able to secure licensing deals with other MP3 player manufacturers, said Steve Dowling, an Apple spokesman. "Creative is very fortunate to have been granted this early patent," Apple's CEO Steve Jobs said in a press release.`"
so does that mean Creative invented the treeview, or the database search?
cuz billions of programs out there may be affected by this.
100 million is a pretty big payout for an obvious way to navigate through music that I myself invented when I was a kid. This method is: "The patent covers an interface that lets users navigate through a tree of expanding options, such as selecting an artist, then a particular album by that artist, then a specific song from that album."
I mean, isn't that how the stuff is organized in the record store too?
"No wireless. Less space than a nomad. Lame." 100 million dollars in patent taxes lame.
This is a great example. The patent claims read just as described: how do you find a track to play using indexing.
Patents like this are not helping the public interest, but are simply ways for companies to lock out ideas without having to pay to develop them.
Time for the open source community to make "open patents" that are used to attack companies like creative that abuses them.
Ed Barbar, President and General Manager, Furnit USA
I have three fears with every line of code I write:
- It is buggy
- A better block of code already exists in SourceForge or somewhere else on the Internet
- It is stepping on one or more patents for completely obvious or barely novel ideas
I believe at this point paranoia is not only rational but optimistic and gin and tonic are my only defense since I can't afford lawyers, guns, and money.
Robert Oschler - RobotsRule.com
It's good to see companies which patent and sue about trivial ideas get sued themselves. Remember the trash can patent?
// MD_Update(&m,buf,j);
Good point.. By licensing the patent, they are legitimizing it. The net effect is that it creates a big barrier to entry for new competitors. This is easy to do when you're the dominant player already seeing tons of revenue. Paying millions in licensing is a non-starter for the small innovators looking to enter that market.
http://forums.macrumors.com/showpost.php?p=275275
I think the thing that people are forgetting here is that by settling Apple is pretty much making Creative defend this patent, essentially outsourcing the litigation - they pay nothing for that. If Creative does not defend the patent, or loses any case setting new precedent, Apple could conceivably sue to get the $100 million back.
Plus, they get back money, as stated above, for the 'Made for iPod' program that Creative is now a part of, and the iPod ecology is enhanced. They have taken on a partner here.
This is a win for Apple thinking long term. Good chess playing.
What I learned from my company (by seeing it done before my very eyes) was that you get a patent on what will do the most to hinder the competition, regardless of whether it is an innovative part of the design. It's up to the attorney writing the patent to hype up how it is innovative. Patents in the last several decades get pushed through with little or no regard to the "Non-obvious" and similar clauses. I and a co-worker have two patents, each in both our names and we had nothing to do with choosing what areas were patented. FWIW, the complete schematic and an attorney-digested (i.e. expanded in to legalese/patentese) descripion of the complete device's operation were put into the patent. I could show you what I and the other engineer thought were the innovative parts, but those weren't what got patented.
If you can get a patent on a method for growing broccoli sprouts, go for it - it will only take the rest of the broccoli sprout industry going to court to get it declared invalid. Yes, it happened, google for the story.
Tag lost or not installed.
Apple should have agreed to license Fairplay to Creative so that their devices could play music from the iTMS. In fact, they should offer to do so for every company that is not currently making a device that rhymes with "boon". I've posted an open letter to Apple which discusses the need to cut Microsoft off from their ability to buy their way into the digital music market. You can read it here.
The world's blankiest blank.
The settlement terms basically prove it. Regardless of whether Creative's patents were valid or not, Apple just performed a legal jujitsu. It basically allows Apple to use Creative to fight its battles. One, the settlement strengthens the validity of Creative's patents. Creative is now free to go after the likes Sandisk (which has overtaken it in marketshare in the last year) and iRiver. Most importantly, it allows Creative to throw a wrench into Zune's imminent launch. I bet Microsoft never saw this coming. If Creative was a starving pit bull that was going after Apple out of anger, Apple just whipped out a nice juicy steak at the last second, made friends, and is now about to sic Creative the Well-Fed Pit Bull on Sandisk and Microsoft. There's no doubt Apple's lawyers read Creative's lawyer the riot act. Patent battles are super expensive, and with Creative having to simultaneously sue Apple as well as defend against the counter-suit, the whole process would probably take 5 years or more and cost tens of millions of dollars. With Creative's sales shrinking quarter to quarter, it would be hard for the company to keep paying the lawyers over such an extended period of time. Last quarter's results kind of proved that. But I think what really made Creative see the writing on the wall is the sudden appearance of Zune. Zune is the classic Microsoft move of screwing its partners over once they've outlived their usefulness (or in this case, proved totally useless). Creative maybe would have been willing to stick it out were it not for Zune, but with Zune competing directly with Creative's own products, they must have realized the company would be dead and bankrupt in a year, and once the money is gone, so long lawyers! I'm willing to bet that virtually all the terms of this settlement were proposed by Apple. It makes Creative look like a winner when Creative will now be fighting battles on Apple's behalf. It also shows that Apple is serious about not letting the iPod give any ground in terms of marketshare. And it wouldn't surprise me if Creative's "Made for iPod" products quickly ends up outselling Creative's players. And unlike the music players, the accessories will probably be hugely profitable for Creative, which will just make Creative Apple's bitch in reality instead of just symbolically. I can't wait for the next headline, though: "Creative Sues to Stop Microsoft Zune." Steve Jobs IS the new Godfather!