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Creative sues Apple, seeks iPod import ban

Loss-making MP3 player firm alleges patent infringement

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Creative has at long last put its threats into action and slapped rival MP3 player maker Apple with a lawsuit alleging the iPod violates its intellectual property. It has also asked the US International Trade Commission to ban imports of allegedly infringing products.

Apple has yet to respond to the complaint's filing.

Creative has been dropping hints about the prospect legal action ever since it was granted a key user interface patent, number 6,928,433, in August 2005. The patent covers the basics of a side-scrolling menu system that allows the user to select a song. Creative first implemented the UI concept in a machine that shipped September 2000. Apple's iPod didn't debut until October 2001.

A year later, Apple filed a patent application to protect the iPod UI. Its application was later rejected on the basis of prior art, a finding held up at a subsequent Apple-instigate review.

Creative filed its lawsuit today with the US District Court for Northern California. The complaint asks the court to ban the sale of the iPod and iPod Nano, and to force Apple to pay damages. That would still leaves Apple able to ship the Shuffle...

If it wins, Creative could use the cash. It recently reported Q3 FY2006 sales of $225.7m, down 32.4 per cent from $333.8m in the year-ago quarter. It lost $114.3m ($1.38 a share), including one-time charges of $41.6m primarily related to goodwill and restructuring charges for 3Dlabs and an investment gain of $2m. Excluding the one-offs, Creative lost $74.7m (90 cents a share). This compares to net income of $15.9m (18 cents a share) for the same quarter last year - ignore a $14.8m investment gain, and the company's Q3 FY2005 net income was $1.1m (one cent a share). ®

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