Apple pays $100m to settle iPod patent clash lawsuits

Apple is to pay $100m to settle its legal spat with rival MP3 player maker Creative Technology. The cash not only brings Creative's patent infringement lawsuits to a close but provides Apple with a licence to its intellectual property. Apple will also terminate its counter-suits.

Creative needs the money, of course. During its most recently completed quarter, Q4 FY2006, it lost $12.7m - and that's with a $10m tax credit taken into account. Its sales were down 24.4 per cent year on year from $305.4m to $230.9m - up fractionally on the previous quarter's $225.7m.

For the full year, sales were down 8.3 per cent from $1.2bn to $1.1bn.

The $100m payment, then, is a big deal for Creative, but small change for Apple, which posted quarterly sales of $4.4bn and a net income of $472m having sold more than 8.1m iPods - the devices affected by Creative's patent dispute - in the three months to 1 July 2006, the company's third quarter.

Apple has always maintained it didn't infringe Creative's patents, and the settlement doesn't change that - or the Creative's assertion that it did. ®