Apple settles Creative iPod litigation


In what may be a disappointing turn of events for some, Apple has apparently settled the lawsuit brought by Creative regarding the iPod user interface for $100 million. The payment grants Apple a licence to use the hierarchical menu system covered by the Creative patent.

This may, of course, be puzzling to some, as those who have been following the iPod from the beginning will know that when it was released, its wonderfully simple (and particularly innovative) interface was one of the things that set it apart from the competition. The look and feel lawsuit against Microsoft in the early 1990s demonstrated that user interfaces were not copyrightable (although patents may well be another matter). Why then have Apple chosen to settle?

As the c|net article notes, it is basically down to the way US patent law works – the first person to file a patent will usually be the one who holds it. Proving otherwise is a costly process and subject to the vagaries of litigation – in other words, Apple could have spent an awful lot of money contesting the patent and still not get the rights to it. In such circumstances, settlement is the more commercially sensible option. One wonders how significant a proportion that $100 million is out of iPod-generated revenue. Certainly it appears to be a sizeable sum for Creative – the company just reported a $12.7 million loss in its fourth quarter on the back of weak sales.

What does this mean for Apple? Generally this is a good thing. Whilst it is hard to see Creative having waged a lengthy legal battle against Apple had they chosen to contest the patent, by settling, Apple avoids the negative press that might have been generated by it pounding the competition into submission, and Creative comes off looking like something of a patent troll.

The next battle will be against Microsoft, which is launching its Zune player later in the year, if sources are to be believed. That one may not be over quite so quickly.

Comments are closed.