=DJ Apple/Creative Settlement Ends Prospects Of Long Battle
By Donna Fuscaldo Of DOW JONES NEWSWIRES (This article was originally published Wednesday)
Ending what some industry observers had said could be a long, drawn-out battle, Apple Computer Inc. (AAPL) and Creative Technology Ltd. (CREAF) said Wednesday they reached a settlement that ended the companies' patent infringement dispute.
The news sent shares of Singapore-based Creative up nearly 30%, or $1.79, in after-hours trading, according to iNet. Shares of Apple were flat, according to iNet.
In a press release, the companies said Cupertino, Calif.-based Apple will pay Creative $100 million for a paid-up license to use Creative's recently awarded patent in all of Apple's products. If Creative licenses the patent to others, Apple can recoup a portion of the payment.
In addition, Creative said it will announce its own iPod accessory products later this year.
"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."
In May, Creative and its Scotts Valley, Calif., subsidiary Creative Labs Inc. filed a complaint with the International Trade Commission, claiming the company's MP3 player interface patent covers Apple's iPod digital media player. Creative asked the ITC to prevent Apple from selling its iPod models in the U.S.
Apple countersued, alleging Creative violated three Apple patents for technologies involved in the display of computer data, editing mobile data on a computer and the use of certain computer icons.
During the back-and-forth between the two companies, analysts speculated the legal fight could go on for at least a year.
For its fourth quarter reported earlier in August, Creative narrowed its loss and forecast a return to profitability by December. Creative, which makes MP3 players, has been reeling from competition from the likes of Apple and its popular iPod music player. The company faces even more competition when Microsoft Corp. (MSFT) enters the portable music player arena later this year.
In the press release, Creative Chairman and Chief Executive Sim Wong Hoo said: "We're very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative." He said the one-time licensing payment of $100 million will contribute approximately 85 cents of earnings per share to its current quarter ending Sept. 30. -
By Donna Fuscaldo;
Dow Jones Newswires; 704-371-4263; donna.fuscaldo@dowjones.com (END)
Dow Jones Newswires August 24, 2006 07:32 ET (11:32 GMT) Copyright (c) 2006 Dow Jones & Company, Inc. |
