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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.`"
""Creative is very fortunate to have been granted this early patent," Apple's CEO Steve Jobs said in a press release.`"
You can almost hear him whispering "motherfuckers!" under his breath after saying this.
so does that mean Creative invented the treeview, or the database search?
cuz billions of programs out there may be affected by this.
Step 2. License offending patents to Creative for 150M.
Step 3. There is no step 3.
I suppose it's a new version of Rip. Burn. Mix.
... for an anatomical opening to expel the byproducts of digestion and sue everyone in sight with an a*****e.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
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.
.. is that the idea was patentable. I mean come on... a simple heirarchical tree interface got patented? Who cares if it was for an mp3 player - does that make any difference? We've had tree interfaces for a while - its how many of us organize our music libraries (virtual and physical).
_Vishal www.squad9.com
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
Puh-leez. As you can plainly see in this example, Creative is represented by the stick-man with the small ... stick, Creative's legal staff is represented by the stick-devil, and Apple is represented by the two stick-men who appear in the beginning. Any questions?
I think Despair.com said it best in their half-hearted, but sadly successful attempt in patenting the frowny-face emoticon.
If that's not screaming failure in our U.S. government, I don't know what is.
--I gots 99 problems but a new machine ain't one!
AMD! Asus! Whoot! 6 years!
"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."
WTF??
What happened to the "non obvious" requirement for a patent?
Does this patent cover other obvious menus systems? Like say an automobile supply program. You pick a year then a car manufacture then you can pick a model then you can pick an engine type and finally a carburetor.
How obvious does it have to get before the patent processors put down their rubber stamps and reject the application?
The race isn't always to the swift... but that's the way to bet!
If I recall correctly from reading and a bit of training we were given at my company, this is supposed to be the guideline for validity of a patent application. I would think that if you asked just about any computer geek in 1995 to come up with a way to navigate a large music library, a hierarchy would have been the result. This is also how I used to arrange my mp3s before there were nice frontends, as a directory of Artists with subdirectories for Albums for each artist.
"Didn't Apple's leagl team search the internet archives for prior art on this?"
Occam's razor, my friend. Which is more likely to you:
Whenever the subject comes up, various Slashdotters come up with lots of (sometimes laughable) claims of prior art. If only the patent were as simple as Slashdotters made it out to be.
Sitting in my day care, the art is decopainted.
Personally, I think the devil is in the details we weren't told. Such as Apple validates Creatives patent and makes a deal where it won't be granted to Microsoft.
--Won't that be grand? Computers and the programs will start thinking and the people will stop. - Dr. Walter Gibbs
The patent police have commenced random inspections of CD collections.
If you sort your CDs alphabetically by artist and album you will be sued for copyright infringement. You have been warned!
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);
That's going to wipe out the profit margin on sales of 20-30 ipods!
... who holds the patent on using the WM_PAINT message to detect when a portion of an application's window needs to be redrawn. Clearly, someone other than Apple owns this patent, and is refusing to license it to them, because the Windows version of iTunes has been plagued with gaping areas of blackness since its first release.
I mean, come on... does nobody at Apple own a copy of the freaking Petzold book?
</rant>
Dahlmann tightly grips the knife, which he may have no idea how to use, and steps out into the plain.
"And it would be a bad thing if Apple started patenting user interfaces ... really."
Maybe that's a joke that went right over my head, but Apple is quite well known for patenting user interfaces. For instance, nobody else is allowed to depict a hard drive as an icon that looks like a photo or an illustration of a hard drive, because Apple has the patent on it.
Here are some examples:
This is a case of "live by the sword, die by the sword."
Sitting in my day care, the art is decopainted.
The downside is that they'll grab back the $100M from their customers at the earliest opportunity. As if their products weren't already expensive enough...
Maybe I'm overreacting, but hey. Fuck them.
No, you are not over reacting. This is the feedback system for corps. If they misbehave, we the customers, have the option -the obligation- to vote with our wallets. Lawsuits, and petitions, and letters to the board are nowhere as simple and effective as not spending money with them.
Good for you, and I will join you. Bad Corp, No Dollar.
Bless Apple Computers
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.
Plus, Apple benefits by others not being able to make the same interface as the iPod due to this patent (without investing in hundreds of millions of dollars of research and lawyers). I very much expect the settlement license is exclusive save for Creative being able to use its patent on its own players.
Even if everyone stops spending money on Creative products, and it won't matter. Sure, they'd have to trim down their product line to nothing, eventually, but a shell company and lawyers can subsist for a long time on nothing other than infringement lawsuits. Kind of like a cockroach living off the oil in your fingerprint, if you think about it.
I'm not sure what your experience is with legal costs - but I'll give you mine, as an inhouse technology expert at a tier-1 law firm: Ok Tedi Mining and BHP - pollution of a river, the suing of a multinational (one that just yesterday posted a US$10 BILLION profit) in multiple states of Australia, involving the government considering legislation to prevent the lawsuit, had legal costs at the time of settlement, for both parties, of under US$15M (the settlement was for $110M).
Factoring in other things I find it very, very unlikely that the cost of proving such a claim would even come remotely close to exceeding $100M. If you look at a legal team billing $5,000 an hour (which would be a reasonable figure including paralegals, clerks, ancillary support staff as well as lawyers), for, say 60% of the cost, 10% as being court fees, and the remaining 40% as "expert/proof costs" (ie the technical research and findings, as opposed to the legals), that's still in the order of 5 years FULLTIME work by that entire legal team to even use up that.
Not impossible, but exceptionally unlikely.
At least in Australia, and most likely in the US, at least to an extent, if not more, corporates aren't hugely concerned with a lot of legal costs, for one important reason, a large amount of them are tax deductions. Corporate lawyers are happy, charging $500/hr. Corporations are happy footing the bill, because it's a deduction come end of FY.
So, if Creative licenses its IP to other manufacturers, Apple gets a slice of the pie. If Creative sues manufacturers who refuse to license, it's got the Apple precedent to tilt things in its favour. Maybe a slice of that pie is part of the unannounced terms, too.
If I were Creative, I'd be miffed that, having joined the Microsoft Playforsure camp, Microsoft then went on to develop its own PMP. In fact, I'd be tempted to piddle in Microsoft's pot by getting MS to pay a hefty licensing fee or suing it, as needs dictated.
MS will be more likely to license (i.e. "pay money to make the problem go away") knowing that the market leader has stumped up.
I wonder if your fear #3 is grounds for challenging current patent law.
Patent law doesn't need changing, as it already bars 'obvious to someone in the field' ideas, which is what the parent poster was complaining about. We need more people to take a stand against patents that clearly aren't valid. If more people/companies challenged the 'fork and knife' patents, fewer companies would abuse them.
Patent fees should also be based off the assets of the applicant; ie, if I want to patent something, it should cost me enough to make me not just do it willy-nilly, and if Apple, Creative, etc wants to- well, then they should have to pay a bill that makes THEM think twice, too. The challenge, of course, will be figuring out how to keep shell companies (already used for patent holding) from getting around it.
The former (challenging more patents) is unlikely to happen, given that these days the only people who can afford to do so are often publicly held companies, and are under shareholder pressure to go for the absolute cheapest route, or the "known expense" versus the "unknown." Someone at Apple most likely decided that the (fairly small) risk of Creative getting a percentage off all iPod sales past and future, was not worth a known cost of $100M.
Please help metamoderate.
Also, they probably have a bunch of special-case patents which are trivial in the general case, just like this one, which they wouldn't want to create a precedent against.
Someone should patent 'A method for being an asshole while wearing a turtleneck' and see how Jobs reacts.
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.
Patent 6928433
The key claim is the following, plus 15 variations on the theme.
What is claimed is:
1. A method of selecting at least one track from a plurality of tracks stored in a computer-readable medium of a portable media player configured to present sequentially a first, second, and third display screen on the display of the media player, the plurality of tracks accessed according to a hierarchy, the hierarchy having a plurality of categories, subcategories, and items respectively in a first, second, and third level of the hierarchy, the method comprising: selecting a category in the first display screen of the portable media player; displaying the subcategories belonging to the selected category in a listing presented in the second display screen; selecting a subcategory in the second display screen; displaying the items belonging to the selected subcategory in a listing presented in the third display screen; and accessing at least one track based on a selection made in one of the display screens.
It really is as daft as it sounds.
Looks like CREAF is on track to lose ~$118 mil this year. Coincidence? Suddenly they are only losing $18mil..
The whole purpose was to legitimize the patent in order to slow down competitor number 3, 4 and 5.
...Of course that ALL look alike though.
CHOICE 1: Get the patent squashed, anyone can copy.
CHOICE 2: Settle in order to legitmize the patent, share the toll booth.
This is most likely a move to keep sandisk at bay with that new look alike.
The government which is strong enough to protect you from everything is strong enough to take everything from you.
Patent for hierarchical user interface? Anything from a file system to nested menus is a hierarchical user interface. Oh but this one is used in a music player. That's where the innovation comes in.
I'm not sure what you're talking about but it is not the claims from the patent. If you'd like to respond, I'm going to require that you read the claims of the patent because otherwise you are literally wasting my time. Here is the link. The Patent
The patent system is in need of a major reform. Currently when you are sued for patent infringement you have the burden to prove that either you don't infringe on the patent or that the patent is invalid. This obviously doesn't work.
First, you are apparently unaware of a JMOL for clearly unreasonable patent infringement suits. Secondly, it's called "a defense". Technically it's optional.
Instead, the patent holder should have the burden of proving that the invention is truly novel and non-obvious. The patent would simply serve as documentation proving when a particular thing was invented.
It's called "patent prosecution" and it's the only way to get a patent in the United States. Clever idea.
The patent office would not need to examine patents for validity (i.e. it could continue doing what it's doing) since that would be established at the trial. This would cut down on the amount of "one-click" patents, reduce or even eliminate the need for defensive patents, and make patent trolling much more difficult.
(I've already deleted 100 lines of flame but let me say) I don't believe for a second that you have the slightest idea what is or is not a valid patent. Secondly, I don't think you have put any thought whatsoever into how you would prove or disprove this at a trial from scratch. (I say my patent is valid. We're done. Oh no - suddenly someone has to prove it's INVALID - we're right back to the problem you claim to have solved.) I think that you are unaware that patent prosecution before the patent office takes anywhere from 2-6 years. You suggest we move that (or some variant) into the COURTROOM? Are you trolling? Thirdly, you have begun your paragraph with a groundless conclusion and end it the same way - how in God's name would this make trolling any more difficult? Under your system, I don't even need to WIN the infringement suit, I can simply tie up your exorbitantly expensive legal team for an additional 5 years. It's legal extortion at its best.
I know this post is not very nice but please bear in mind that what you've read is completely rewritten. I don't intend to flame, but I do think you're completely out of your element. The bottom line, for me, is that I really wish Slashdot would stop carrying stories about patents because misinformation and worse is consistently moderated to the top. Without a doubt, Slashdot is the Fox News of patents.
All these patent disputes remind me of the short story Melancholy Elephants by Spider Robinson.
_ 1.htm
http://www.baen.com/chapters/W200011/0671319744__
Don't know something? Look it up. Still don't know? Then ask.
"...using menus in any way, shape or form. But on, like, an electronic thingee! Which is the clever bit, and makes it patentable. Really."
In the software industry, developers actively avoid patent searches - because they are all stupid (with a few exceptions like RSA), and to avoid triple damages from stupid patent lawsuits. This is an answer to why software patents are bad - but patents in other industries might be ok. If you are building an oil refinery, experimentation is expensive. Licensing a patent for a method that is already worked out makes sense. (Computer simulations might reduce this cost - but ultimately you have to build it to be sure it really works.) Software experimentation is free apart from time - and takes far less time than a patent search.
so, can Apple get $100M from other OS makes who use a Heirarchial File System for their disk drives? Or is the patent system illogical?
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!
"No, you are not over reacting. This is the feedback system for corps. If they misbehave, we the customers, have the option -the obligation- to vote with our wallets. Lawsuits, and petitions, and letters to the board are nowhere as simple and effective as not spending money with them."
Interesting. Given that Apple tried to file a similar patent and Creative was simply faster -- if things had been a little different and Apple had been awarded the patent, what do you think would be happening now?
Make no mistake: if Apple had filed their patent just a few months earlier, we'd be swapping "Apple" and "Creative" in all of these posts. Remember, Apple is the company that doesn't allow anybody else to draw their hard drive icon in the style of a hard drive. If you really feel this strongly about companies enforcing their patents, you probably stopped buying Apple products years ago. If Apple'd been first; they'd be all over Creative, et al. like they were the last chopper out of Saigon.
Sitting in my day care, the art is decopainted.
Adapted from my blog. I know this is blasphemous, but there isn't enough litigation over patents. By this I mean actual court cases, there are plenty of threats. Only 1.5% of all patents are litigated, and only .1% are litigated to trial (of that .1%, over 50% are invalidated). This is far too little. Let me explain.
We know the level of litigation is too little because of positive externalities associated with litigation. If the accusor loses, invalidating a patent benefits everyone, not just the firm that sues for the invalidation. If the accusor wins, clarity in validity also benefits others. So there is a free riding problem with litigation (especially since it is so costly).
Lets say I hold a patent on tennis shoes and I expect to make a million dollars from that patent. If another shoe maker named Nike sues me over the patent, how much would I be willing to spend to defend the patent? $999,999. How much would Nike be willing to spend to invalidate the patent? Invalidating the patent doesn't give Nike a monopoly, so assuming in a competitive model there are no (or lower than monopoly) profits for Nike. So Nike would be willing to spend less to invalidate the patent than I would to keep the patent valid. Thus it may in Nike's best interest to just license a completely ludicrous patent. That seems to be what happened here.
Not only is this litigation costly, but anyone found infringing on a patent in court pays TRIPLE the claimed damages! That is high stakes indeed. To add to this problem, the alleged infringer bears the burden of proof, that the patent is invalid or that they didn't violate the patent. The wording for proof is "clear and convincing evidence," that is strong wording. So it shouldn't be surprising to find that 95% of all defendants settle without going to court.
A good way to produce more clarifying litigation is to create incentives to litigate. One idea (which I think is a bad one) is to allow the government to challenge patents. A better idea is to offer a bounty on invalidated patents. One problem with the bounty idea is that mostly worthless patents would be invalidated this way, but if you limited the bounty to licensed patents, you could eliminate a lot of this problem. The bounty could be grant the patent to the challenger for a few years, or be a flat rate payment. Lastly, there are public interest groups already doing great work towards this end (such as the EFF and Public Patent Foundation), by funding them with incentives or grants we could improve the situation.
Another fix is to force firms to litigation. By capping the dollar value of settling, firms my opt for a court remedy rather than an out of court secret agreement. Limiting settling and other forms of collusion makes more information public, which can benefit more people.
The third option for getting more litigation is to reduce costs of litigation. Removing the 3X payout, decreasing the time in court, and changing the wording from "clear and convincing evidence" to something less strong. Even shifting some of the burden of proof towards the accusor would speed things along. One other option to make litigation more affordable is to penalize accusers for refuted claims--since the general practice is to claim as much as possible and see what sticks (see SCO for an example).
It is a crying shame that Apple just paid off the patent trolls here. Had they put up the $100 million into a legal fund and gotten this rediculous patent invalidated, it would have benefitted society. Who knows who else will get hit with this silly patent claim now? It isn't Apple's job to benefit society, but as long as we keep feeding the trolls, we'll have to keep paying.
You parrot about details but can't be bothered to expose them to us. Don't waste your supreme wisdom and smack our common sense.
IANAL but write like a drunk one.
1. Creative gets awarded silly patent.
2. Apple uses something that falls under the patent.
3. Creative sues Apple.
4. Apple fights back.
5. Apple fights back.
6. Apple fights back.
7. Microsoft announces Zune, which uses something that falls under the same patent.
8. Apple settles for $100 million and sets a precedent.
9. Creative uses the precedent to sue Microsoft.