Apple settles with Creative for $100 million

Paid-up license to use Creative's recently awarded patent in all Apple products

24 August 2006 0:18 GMT / By Stuart Miles

Apple and Creative has today announced a broad settlement ending all legal disputes between the two companies.

Apple will pay Creative $100 million for a paid-up license 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. 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 ends a year long court wraggle following Creative's successful win of the interface patent.

The settlement will be great news to Mr Sim Wong Hoo, who in an interview with Pocket-lint last December, told us

“I am okay with how many players they [Apple] sell because I will make money in the end.”

"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. 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."