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Apple Settles Creative Lawsuit for $100 Million 316

Posted by samzenpus
from the have-some-money dept.
E IS mC(Square) writes "CNet News reports that `Apple Computer and Creative Technology have agreed to settle their legal dispute over music player patents for $100 million, the companies announced Wednesday. The $100 million, to be paid by Apple, grants Apple a license to a Creative patent for the hierarchical user interface used in that company's Zen music players. The patent covers an interface that lets users navigate through a tree of expanding options, such as selecting an artist, then a particular album by that artist, then a specific song from that album. Creative filed for the patent on Jan. 5, 2001. Apple can get back some of the $100 million payment if Creative is able to secure licensing deals with other MP3 player manufacturers, said Steve Dowling, an Apple spokesman. "Creative is very fortunate to have been granted this early patent," Apple's CEO Steve Jobs said in a press release.`"
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Apple Settles Creative Lawsuit for $100 Million

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  • Only a patent attorney can scream loud enough!
  • by NexFlamma (919608) on Wednesday August 23, 2006 @08:32PM (#15966966) Homepage
    ""Creative is very fortunate to have been granted this early patent," Apple's CEO Steve Jobs said in a press release.`"

    You can almost hear him whispering "motherfuckers!" under his breath after saying this.
    • by Anonymous Coward on Wednesday August 23, 2006 @08:46PM (#15967016)
      I've had it with these motherfucking patents on this motherfucking planet!
    • It's good to see companies which patent and sue about trivial ideas get sued themselves. Remember the trash can patent?
      • by theLOUDroom (556455) on Wednesday August 23, 2006 @11:04PM (#15967475)
        It's good to see companies which patent and sue about trivial ideas get sued themselves. Remember the trash can patent?

        Is it?

        It's not like that money comes from nowhere or means nothing.
        Consider how many people 100 million dollars could employ.
        Consider that nonsense like this is a direct disincentive to both innovation and copetition.

        What you're saying is like saying that it's nice that heroin dealer got shot by herion dealer B. Is this really a good thing?
        • by StikyPad (445176) on Wednesday August 23, 2006 @11:16PM (#15967512) Homepage
          Consider how many people 100 million dollars could employ.

          Just one, but I'll work O/T and weekends too!
        • by gameforge (965493) on Thursday August 24, 2006 @12:14AM (#15967685) Journal
          Consider how many people 100 million dollars could employ.

          A thousand perhaps?

          The money didn't vanish, it moved. That same $100m should be able to employ equally as many people at Creative, or less better people or more worse people or whatever. For all you know that money was lining some bank account somewhere, which will now be $100m shorter with little affect on employees, whereas Creative will use it to create a thousand jobs (like perhaps a better Linux team)

          I see it as the old, fair and friendly neighborhood heroin dealer shot the new fast talkin' "tough guy" heroin dealer (honestly, like Apple, the perfect and selfless angel was punched in the face by Creative, the big bad devil).

          I like Apple, honest. I think Creative did an unethical thing with this lawsuit; and I agree with your reamark about it discouraging competition and innovation.

          Now ask me if I think Apple did an ethical thing by flying into Creative's camp, pissing on their tent, and taking Creative's fair? share of Rio's MP3 player market. Hmm?

          I have to assume Apple wouldn't visciously steal Creative's market share if "business" hadn't demanded that they take that opportunity. I also have to assume that Creative dislikes patents as much as you and I.

          I'll bet most athletes, at times, dislike the fact that if they have less points than their opponent, they lose. They may have worked harder. They may have deserved it more. They may have wantedit SO much more. Their eighteen kids may be dying and only wishing to see their mother/father win, whereas their opponent's looking for their eighteenth win.

          (point being, everybody has to play by the unfair rules, and $100m never just "vanishes" in a lawsuit between two giants, unless of course it's to a lawyer)
          • Re: (Score:3, Insightful)

            by Doc Squidly (720087)

            honestly, like Apple, the perfect and selfless angel was punched in the face by Creative, the big bad devil

            I'm not sure if you're being facetious, or if you really "love" Apple that much. Its not good to love any corporation. (And not for the stupid Dr. Phil, they won't love you back, reason, either)

            Lets be realistic; Apple and Creative are both large corporations, who are in business to make money and use legal action to due so, where they deem appraise.

            Don't believe me? Referee to This [slashdot.org]

      • by commodoresloat (172735) * on Wednesday August 23, 2006 @11:38PM (#15967570)
        Remember the trash can patent?

        Yeah. It got thrown out.

      • Re: (Score:3, Informative)

        by LKM (227954)

        That was a design patent (they tried to get the rights to their specific look, not the concept), not a patent.

    • by Riding Spinners (994836) on Wednesday August 23, 2006 @09:10PM (#15967111)

      Writing software for a Mac and/or Linux is a very different proposition from fabricating hardware for a niche music player.

      As expensive as software development is, it doesn't really compare with tooling a factory for making hardware that works with a specific MP3 player, then programming the firmware for said device.

      The iPod has been using pretty much the same dock connector for a couple years now, so if you make a gadget for the iPod dock connector there's damn near 50 million potential customers out there.

      Creative has clawed it's way to be the biggest of "the rest of them" with the Zen (at least in terms of last year's sales), but I wouldn't be surprised if somebody came out with a statistic that said there were more iRivers out there than Zens. If you are going to go after the "not an iPod" market, your best bet is to make generic gadgets which plug into the headphone jack of any player, and don't rely on the manufacturer-specific features on one niche player.

      The iPod is far from perfect. It needs more RAM, and still lacks gapless MP3 playback (a major buzz-kill), but with its market dominance and it's dock connector with standardized pin-outs, it's no surprise that it's what most manufacturers are building accessories for.

      If I'm the CEO of "SuperCoolOggAndMP3Players, inc.", I'd be talking to Apple about licensing the iPod dock for my player. It probably would not be a cheap deal, but it would give me a leg up over Creative and all the other also-rans out there, including the upcoming players from Microsoft.

      Then again... being a sore loser, rolling on the ground kicking and screaming, and extorting $100,000,000 out of a company would probably make Creative more money than their iRivers ever would. Maybe frivolous corporate lawsuits are the future of "competition".

      • Re: (Score:3, Insightful)

        by Wolfbone (668810)

        Writing software for a Mac and/or Linux is a very different proposition from fabricating hardware for a niche music player."

        Obviously.

        "As expensive as software development is, it doesn't really compare with tooling a factory for making hardware that works with a specific MP3 player, then programming the firmware for said device."

        Obviously.

        But the patent in question is not for any invention in hardware fabrication technology or even for an invention that solves some problem specific to firmware

    • Re: (Score:2, Insightful)

      As much as I hate Apple, I hate bullshit patents more.
    • by dnoyeb (547705) on Wednesday August 23, 2006 @10:05PM (#15967296) Homepage Journal
      Actually, to me it sounds like he is saying touché.
    • Don't be fooled... If Apple had owned the patent, they'd be gouging Creative twice as hard.
  • by Kanasta (70274) on Wednesday August 23, 2006 @08:36PM (#15966974)
    so does that mean Creative invented the treeview, or the database search?
    cuz billions of programs out there may be affected by this.
    • by elysian1 (533581) on Wednesday August 23, 2006 @10:07PM (#15967301)
      Since this case was settled, it doesn't mean anything. It just means Creative was willing to drop the lawsuit for $100 million.
    • by Hellasboy (120979)
      well, with how the patent office works (if i'm wrong, feel free to correct me) is that it's not the treeview/db search in *general* but how it works to play digitzied music files in a player.

      they patented a utilization of technology in a specific way.
    • by dnoyeb (547705)
      Its probably limited to handheld devices.

      Also I am not sure if this is a design or utility patent!?
    • Re: (Score:3, Insightful)

      "so does that mean Creative invented the treeview, or the database search?"

      No. It means they were the first to patent it with regards to a music player. They wouldn't be going after software developers over this. I'm not defending Creative's patent specifically. I'm just pointing out that the 'for a music player' bit makes a big difference.
  • by catwh0re (540371) on Wednesday August 23, 2006 @08:36PM (#15966976)
    Step 1. Pay Creative 100M

    Step 2. License offending patents to Creative for 150M.

    Step 3. There is no step 3.

    I suppose it's a new version of Rip. Burn. Mix.

    • Re: (Score:3, Insightful)

      by penix1 (722987)
      3. Pass the cost of both to the customer.

      You don't think Creative or Apple are going to eat that cost do you?

      B.
  • by 140Mandak262Jamuna (970587) on Wednesday August 23, 2006 @08:38PM (#15966983) Journal
    ... for an anatomical opening to expel the byproducts of digestion and sue everyone in sight with an a*****e.
  • This is BS (Score:5, Interesting)

    by hackstraw (262471) * on Wednesday August 23, 2006 @08:42PM (#15966998)

    100 million is a pretty big payout for an obvious way to navigate through music that I myself invented when I was a kid. This method is: "The patent covers an interface that lets users navigate through a tree of expanding options, such as selecting an artist, then a particular album by that artist, then a specific song from that album."

    I mean, isn't that how the stuff is organized in the record store too?

      "No wireless. Less space than a nomad. Lame." 100 million dollars in patent taxes lame.

    • by MavEtJu (241979)
      Yes, but you forget the essential part: "on a computer".
      • by ericdano (113424)
        Oh God. So, if you patent the same thing but say "on clothing", you can patent it? I'll submit my patent for a navigation system which works off clothing.

        This case proves how busted the US patent system is.
    • Re: (Score:3, Insightful)

      by PygmySurfer (442860)
      There were actually several lawsuits between the two companies which this resolves. The article briefly mentioned it, but doesn't go into deal about what those patents actually cover. It is conceivable this is for more than just the hierarchical menus, however.

      Its also conceivable Apple could have spend more than $100 million in legal fees for all of this. Entering into a partnership with Creative is a better way to spend that money. TFA also says Apple could get some of that money back if Creative succ
  • What amazes me (Score:5, Insightful)

    by pickyouupatnine (901260) on Wednesday August 23, 2006 @08:42PM (#15966999) Homepage
    .. is that the idea was patentable. I mean come on... a simple heirarchical tree interface got patented? Who cares if it was for an mp3 player - does that make any difference? We've had tree interfaces for a while - its how many of us organize our music libraries (virtual and physical).
    • Re:What amazes me (Score:5, Insightful)

      by Anonymous Coward on Wednesday August 23, 2006 @09:04PM (#15967086)
      Yeah, which is more scary:

      1) that something *SO* obvious was granted a patent, or
      2) that it was probably cheaper for Apple to pay $100 million rather than to try to prove it was that obvious in court.
      • Apple's motivation is far more likely that they see more benefit to paying this extortion and being, well, along with Creative of course, the only ones allowed to use a hierarchical interface for selecting music...

        Sheesh, talk about ridiculous...

        • Re: (Score:3, Insightful)

          by EnsilZah (575600)
          Also, they probably have a bunch of special-case patents which are trivial in the general case, just like this one, which they wouldn't want to create a precedent against.

          Someone should patent 'A method for being an asshole while wearing a turtleneck' and see how Jobs reacts.
      • Re: (Score:3, Insightful)

        by anaesthetica (596507)
        Really, it's not the court costs that outweigh the $100 million. It's the losses that they would incur from having to give Creative a slice of all the profits from their iPods, their most profitable product and the thing keeping their stock prices high on Wall St.
  • Didn't Apple's leagl team search the internet archives for prior art on this? There was a hack for the RIO300 that did this in 2000 and people begging for the option in 1999.
    The SnowBlind Alliance was the place to get you linux friendly rio software at that time and they had lots of users asking for new features.
    • Re:prior art? (Score:4, Insightful)

      by shark72 (702619) on Wednesday August 23, 2006 @09:02PM (#15967074)

      "Didn't Apple's leagl team search the internet archives for prior art on this?"

      Occam's razor, my friend. Which is more likely to you:

      1. It did not occur to Apple to search for prior art, or,
      2. All the so-called "prior art" examples which you and others have pointed out, actually aren't applicable?

      Whenever the subject comes up, various Slashdotters come up with lots of (sometimes laughable) claims of prior art. If only the patent were as simple as Slashdotters made it out to be.

    • by mgpeter (132079)
      I have a Neo mp3 car player that does exactly what this patent covers, I bought it in 2000.

      What good is the current patent system to our society (in reguard to computer science)?

      For instance, this patent should be stricken by just looking at any ordinary file cabinet. The things these stupid patents cover benefit neither science nor the arts.
  • by edbarbar (234498) on Wednesday August 23, 2006 @08:44PM (#15967011)
    This is a great example. The patent claims read just as described: how do you find a track to play using indexing.

    Patents like this are not helping the public interest, but are simply ways for companies to lock out ideas without having to pay to develop them.

    Time for the open source community to make "open patents" that are used to attack companies like creative that abuses them.
    • by elysian1 (533581)
      The only problem with "open patents" is that unlike open source software, which anyone with a computer can develop, in order to file a decent patent, you'll need to pay a good lawyer anywhere from $6000 to $20,000.
      • by edbarbar (234498)
        Either the open source concept has merit or it does not. If it does, then others outside of the software development circle will support it. After all, as can be seen in this simple example, patents are upstream of the software implementing them.
  • Patent for hierarchical user interface? Anything from a file system to nested menus is a hierarchical user interface. Oh but this one is used in a music player. That's where the innovation comes in.

    The patent system is in need of a major reform. Currently when you are sued for patent infringement you have the burden to prove that either you don't infringe on the patent or that the patent is invalid. This obviously doesn't work. Instead, the patent holder should have the burden of proving that the invention
    • The danger with that system is that there is no value to the patent, and any patent would be granted to anyone with the money to buy one. It would be the network equivalent of people buying every 2,3,4,5 and 6 letter domain name in a new TLD. If you had a few million bux, it would be yours. Sure, you might have to defend them in courst, but you could still squash every small business without a 6-7 figure legal budget.

      I'm okay with your proposal with one addition: mandatory licensing of technology and 3-5 ye
      • by RelliK (4466)

        You don't get it.

        The danger with that system is that there is no value to the patent, and any patent would be granted to anyone with the money to buy one.

        False. If the patent describes a true invention it would be valuable since it would be easy to prove that the invention is novel and non-obvious. The patent would also describe what was invented and when -- both of those things are important if you were to sue someone over it. Finally, the patent filing fee should be very modest so that almost anyone

    • Re:disgusting! (Score:5, Insightful)

      by back_pages (600753) <back_pages@NOsPaM.cox.net> on Wednesday August 23, 2006 @10:36PM (#15967384) Journal
      You don't have the slightest clue what you're talking about. (This is the 1 sentence that has replaced the 100 line flame that I just deleted.)

      Patent for hierarchical user interface? Anything from a file system to nested menus is a hierarchical user interface. Oh but this one is used in a music player. That's where the innovation comes in.

      I'm not sure what you're talking about but it is not the claims from the patent. If you'd like to respond, I'm going to require that you read the claims of the patent because otherwise you are literally wasting my time. Here is the link. The Patent [uspto.gov]

      The patent system is in need of a major reform. Currently when you are sued for patent infringement you have the burden to prove that either you don't infringe on the patent or that the patent is invalid. This obviously doesn't work.

      First, you are apparently unaware of a JMOL for clearly unreasonable patent infringement suits. Secondly, it's called "a defense". Technically it's optional.

      Instead, the patent holder should have the burden of proving that the invention is truly novel and non-obvious. The patent would simply serve as documentation proving when a particular thing was invented.

      It's called "patent prosecution" and it's the only way to get a patent in the United States. Clever idea.

      The patent office would not need to examine patents for validity (i.e. it could continue doing what it's doing) since that would be established at the trial. This would cut down on the amount of "one-click" patents, reduce or even eliminate the need for defensive patents, and make patent trolling much more difficult.

      (I've already deleted 100 lines of flame but let me say) I don't believe for a second that you have the slightest idea what is or is not a valid patent. Secondly, I don't think you have put any thought whatsoever into how you would prove or disprove this at a trial from scratch. (I say my patent is valid. We're done. Oh no - suddenly someone has to prove it's INVALID - we're right back to the problem you claim to have solved.) I think that you are unaware that patent prosecution before the patent office takes anywhere from 2-6 years. You suggest we move that (or some variant) into the COURTROOM? Are you trolling? Thirdly, you have begun your paragraph with a groundless conclusion and end it the same way - how in God's name would this make trolling any more difficult? Under your system, I don't even need to WIN the infringement suit, I can simply tie up your exorbitantly expensive legal team for an additional 5 years. It's legal extortion at its best.

      I know this post is not very nice but please bear in mind that what you've read is completely rewritten. I don't intend to flame, but I do think you're completely out of your element. The bottom line, for me, is that I really wish Slashdot would stop carrying stories about patents because misinformation and worse is consistently moderated to the top. Without a doubt, Slashdot is the Fox News of patents.

  • by robotsrule (805458) * on Wednesday August 23, 2006 @08:46PM (#15967018) Homepage
    I have three fears with every line of code I write:

    - It is buggy
    - A better block of code already exists in SourceForge or somewhere else on the Internet
    - It is stepping on one or more patents for completely obvious or barely novel ideas

    I believe at this point paranoia is not only rational but optimistic and gin and tonic are my only defense since I can't afford lawyers, guns, and money.
    • by VValdo (10446) on Wednesday August 23, 2006 @09:02PM (#15967077)
      I wonder if your fear #3 is grounds for challenging current patent law. I mean, the constitution says the congress shall have power:

      To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;


      I believe at this point paranoia is not only rational but optimistic and gin and tonic are my only defense

      If it can be demonstrated that the current law is HAMPERING the progress of science, would that not make overreaching patent law unconstitutional? That may be a hard case to make, but I bet there is a ton of evidence to support the premise, from scientists who are afraid to invent or publish, programmers who are afraid to release code, corporations which sit on inventions rather than exploit them, etc. Would not a climate of fear engendered amongst Authors and Inventors not be hampering the progress of science and the useful arts?

      Incidentally, I note that the constitution specifically refers to "writings and discoveries." What is the "discovery" related to this particular patent?

      W
      • Re: (Score:3, Insightful)

        by Overzeetop (214511)
        If it can be demonstrated that the current law is HAMPERING the progress of science, would that not make overreaching patent law unconstitutional?

        Of course not, this isn't about law, it's about money and power. Law is always about preserving money and power. Should anyone question that fact, it generally means that they do not understand who's money and power is being affected.

        What is the "discovery" related to this particular patent?

        I know it's a rhetorical question, but for the younguns among us, writings
      • Re: (Score:3, Insightful)

        by RexRhino (769423)
        If extremly specific sections of the bill of rights can be outright ignored without anyone complaining, then I don't think that the whole "Progress of Science and useful Arts" argument is going to hold much water.

        The price you pay in order for people not being allowed to own guns, and for companies not being allowed to advertise cola when kids might be watching on television, and for throwing U.S. citizens in prison without trial as "enemy combatants", or whatever convientient unconstitutional laws that hav
      • I wonder if your fear #3 is grounds for challenging current patent law.

        Patent law doesn't need changing, as it already bars 'obvious to someone in the field' ideas, which is what the parent poster was complaining about. We need more people to take a stand against patents that clearly aren't valid. If more people/companies challenged the 'fork and knife' patents, fewer companies would abuse them.

        Patent fees should also be based off the assets of the applicant; ie, if I want to patent something, it sho

        • by StikyPad (445176) on Wednesday August 23, 2006 @11:33PM (#15967558) Homepage
          If more people/companies challenged the 'fork and knife' patents, fewer companies would abuse them.

          I believe you mean: An apparatus to divide food into portions of arbitrary size, by keeping the initial portion in place by holding the handle of the multi-pronged device, while simultaneously grasping the handle of the bladed device, and moving the thin or serated edge back and forth in a sawing motion against the food, and subsequently introducing those portions into an oral oriface using the multi-pronged device, or leaving them in their original position, or thereabouts, as desired, by firmly pressing one part of the bladed device against the portion to facilitate removal of the multi-pronged device from the aforementioned portion. Patent(s) pending.
      • by westlake (615356)
        If it can be demonstrated that the current law is HAMPERING the progress of science, would that not make overreaching patent law unconstitutional?

        The federal courts only accept cases which can be framed within the very narrow confines of an ordinary legal action. They do not hold open-ended legislative hearings and they do not make economic policy.

        It is called "Separation of Powers" and it means that the Congress and the Eescutive get to decide the terms and conditions for granting a patent.

      • Re: (Score:3, Insightful)

        >Would not a climate of fear engendered amongst Authors and Inventors not be hampering the progress of science and the useful arts?

        Not long ago I was a witness in a patent case against BIGCO (not their real name) for their use of BLINDINGLYOBVIOUSTECHNIQUE (n.i.r.n) in the field of SOMETHINGPROCESSING(n.i.r.n.)

        I chatted with BIGCO's lawyers. They said the field of SOMETHINGPROCESSING is paralyzed due to fear of bogus patent lawsuits and there's been no improvement in it for years.

        Neutral observers they a
    • by Pulzar (81031)

      - It is stepping on one or more patents for completely obvious or barely novel ideas
      I believe at this point paranoia is not only rational but optimistic and gin and tonic are my only defense since I can't afford lawyers, guns, and money.

      Why worry? All you've learned from this example is that you can make a good product that violates someone's pattent, make billions off of it, and then pay a fine of $100 million. And, if you don't make any money by selling that product, then nobody will be asking you to pay

    • by torokun (148213)
      If you can't afford lawyers, nobody's going to sue you for patent infringement...
  • Puh-leez. As you can plainly see in this example [glitter-graphics.com], Creative is represented by the stick-man with the small ... stick, Creative's legal staff is represented by the stick-devil, and Apple is represented by the two stick-men who appear in the beginning. Any questions?

    I think Despair.com said it best in their half-hearted, but sadly successful attempt in patenting the frowny-face emoticon. [despair.com]

    If that's not screaming failure in our U.S. government, I don't know what is.
    • I think Despair.com said it best in their half-hearted, but sadly successful attempt in patenting the frowny-face emoticon. [despair.com]

      Technically and pedantically, what they actually got was a trademark on the Frowny emoticon, NOT a patent. But your point is well taken, that the USPTO is too liberal with trademarks as well as patents, as demonstrated by the egregious trademark abuse by Monster Cable against other concerns using the word monster in their names but which have absolutely no relation to Mon
  • "The $100 million, to be paid by Apple, grants Apple a license to a Creative patent for the hierarchical user interface used in that company's Zen music players. The patent covers an interface that lets users navigate through a tree of expanding options, such as selecting an artist, then a particular album by that artist, then a specific song from that album."

    WTF??

    What happened to the "non obvious" requirement for a patent?

    Does this patent cover other obvious menus systems? Like say an automobile supply pr
  • by cblack (4342) on Wednesday August 23, 2006 @08:54PM (#15967048) Homepage
    If I recall correctly from reading and a bit of training we were given at my company, this is supposed to be the guideline for validity of a patent application. I would think that if you asked just about any computer geek in 1995 to come up with a way to navigate a large music library, a hierarchy would have been the result. This is also how I used to arrange my mp3s before there were nice frontends, as a directory of Artists with subdirectories for Albums for each artist.
    • by antispam_ben (591349) on Wednesday August 23, 2006 @09:33PM (#15967196) Journal
      What I learned from my company (by seeing it done before my very eyes) was that you get a patent on what will do the most to hinder the competition, regardless of whether it is an innovative part of the design. It's up to the attorney writing the patent to hype up how it is innovative. Patents in the last several decades get pushed through with little or no regard to the "Non-obvious" and similar clauses. I and a co-worker have two patents, each in both our names and we had nothing to do with choosing what areas were patented. FWIW, the complete schematic and an attorney-digested (i.e. expanded in to legalese/patentese) descripion of the complete device's operation were put into the patent. I could show you what I and the other engineer thought were the innovative parts, but those weren't what got patented.

      If you can get a patent on a method for growing broccoli sprouts, go for it - it will only take the rest of the broccoli sprout industry going to court to get it declared invalid. Yes, it happened, google for the story.
  • > "Creative is very fortunate to have been granted this early patent,"

    The battle lines have been drawn. I can almost see people inside Apple debating the use of patents as the Nuclear Weapons of this war - mutually assured destruction - you sue me, I sue you.

    And it would be a bad thing if Apple started patenting user interfaces ... really.

    • by shark72 (702619) on Wednesday August 23, 2006 @09:11PM (#15967113)

      "And it would be a bad thing if Apple started patenting user interfaces ... really."

      Maybe that's a joke that went right over my head, but Apple is quite well known for patenting user interfaces. For instance, nobody else is allowed to depict a hard drive as an icon that looks like a photo or an illustration of a hard drive, because Apple has the patent on it.

      Here are some examples:

      • D523,441: Icon for a portion of a display screen
      • 7,064,759: Methods and apparatus for displaying a frame with contrasting text

      This is a case of "live by the sword, die by the sword."

    • by prockcore (543967)

      And it would be a bad thing if Apple started patenting user interfaces ... really.

      Are you being sarcastic? I can't tell.

      Apple already owns tons of user interface patents. They own a patent on "a system and method for customising appearance and behaviour of graphical user interfaces".. you know, skinning.

      You know that little history dropdown that your URL bar has? The one that shows "a list of most recently used URLs"? Apple has a patent on that too.

  • by Arcturax (454188) on Wednesday August 23, 2006 @09:04PM (#15967085)
    Personally, I think the devil is in the details we weren't told. Such as Apple validates Creatives patent and makes a deal where it won't be granted to Microsoft.
    • by tji (74570) on Wednesday August 23, 2006 @09:22PM (#15967160)
      Good point.. By licensing the patent, they are legitimizing it. The net effect is that it creates a big barrier to entry for new competitors. This is easy to do when you're the dominant player already seeing tons of revenue. Paying millions in licensing is a non-starter for the small innovators looking to enter that market.

    • Re: (Score:2, Interesting)

      by libra-dragon (701553)
      I agree. Apple probably thinks that it was worth the 100M to cockblock Microsoft's Zune and other potential infringers. Any self respecting lawyer would have added language that gave Apple right of first refusal on licensing and sale of such patent rights. In a way Creative has to pay (rebate) Apple if any subsequent licensing deals are made. Not a bad investment.
    • by mpaque (655244) on Wednesday August 23, 2006 @10:12PM (#15967318)
      Heh. Most of the press copied this line from the Apple/Creative press release:

      Apple will pay Creative $100 million for a paid-up license to use Creative's recently awarded patent in all Apple products.

      They were in a hurry, though, and not many caught this:

      Apple can recoup a portion of its payment if Creative is successful in licensing this patent to others.

      So, Creative now has cash in the bank, 'validation' of its patent with a license from Apple, and an incentive to go forth and seek licenses from others...

      Then there's this:

      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.

      Apple puts money into Creative, Creative makes iPod accessories, and a cut of the accessory revenue goes back to Apple.

      So... Apple gets rid of some lawsuits, sets things up to make trouble for some other music player makers, and gets another revenue stream. All in all, this doesn't look too bad as a business move for Apple.
  • Watch out!! (Score:3, Funny)

    by paxmaniac (988091) on Wednesday August 23, 2006 @09:05PM (#15967089)
    The patent police have commenced random inspections of CD collections.

    If you sort your CDs alphabetically by artist and album you will be sued for copyright infringement. You have been warned!
  • by JimmytheGeek (180805) <jamesaffeld@nOSPaM.yahoo.com> on Wednesday August 23, 2006 @09:06PM (#15967093) Journal
    That's going to wipe out the profit margin on sales of 20-30 ipods!
  • ... who holds the patent on using the WM_PAINT message to detect when a portion of an application's window needs to be redrawn. Clearly, someone other than Apple owns this patent, and is refusing to license it to them, because the Windows version of iTunes has been plagued with gaping areas of blackness since its first release.

    I mean, come on... does nobody at Apple own a copy of the freaking Petzold book?
    </rant>
  • by primalamn (716272) on Wednesday August 23, 2006 @09:26PM (#15967166)
    I think this post at MacRumors hit the nail on the head:

    http://forums.macrumors.com/showpost.php?p=2752753 &postcount=115/ [macrumors.com]


    So, in summary...

    Apple pays Creative a one time fee of $100M to licence their patents.

    Creative joins the 'Made for iPod' program making accessories for their competitor, Apple, who gets money for 'Made for iPod'.

    Creative still HAS to defend it's patent against other competitors - that's the nature of patents - or licence it to them. If they do, Apple takes some of that money too. In a round-a-bout way, Apple is getting money back from it's competitors. Nice.

    Creative have a much better case because Apple settled.

    Creative still owns a valid patent. If Apple had won, there would be no patent so anyone could copy the Creative/Apple style interface.

    Apple continues on as if nothing has happened. No long court case delaying sales. No injunctions to halt imports.

    Explain to me why people think Apple lost here?

    Creative knew it was about to get reamed by Microsoft's Zune which it's players aren't compatible with. They knew to get out of the market. Instead of legitimising Microsoft's offering, they've tied up with Apple. It might bug us that Apple have legitimised a bogus patent but it's otherwise very, very smart.


    I think the thing that people are forgetting here is that by settling Apple is pretty much making Creative defend this patent, essentially outsourcing the litigation - they pay nothing for that. If Creative does not defend the patent, or loses any case setting new precedent, Apple could conceivably sue to get the $100 million back.

    Plus, they get back money, as stated above, for the 'Made for iPod' program that Creative is now a part of, and the iPod ecology is enhanced. They have taken on a partner here.

    This is a win for Apple thinking long term. Good chess playing.
    • Re: (Score:3, Insightful)

      by fishdan (569872) *
      Win for apple, loss for the consumer. Once again I find me self being a mac lover who hates apple. *sigh* Jobs has done us no favors my conceding to a blatantly obvious patent. The one thing I hope that comes out of this is some other company decides to fight creatiev and wins, and then Apple will have paid that $$$ for nothing.
  • by Bushcat (615449) on Wednesday August 23, 2006 @09:49PM (#15967244)
    From the settlement, "Apple can get back some of the $100 million payment if Creative is able to secure licensing deals with other MP3 player manufacturers"

    So, if Creative licenses its IP to other manufacturers, Apple gets a slice of the pie. If Creative sues manufacturers who refuse to license, it's got the Apple precedent to tilt things in its favour. Maybe a slice of that pie is part of the unannounced terms, too.

    If I were Creative, I'd be miffed that, having joined the Microsoft Playforsure camp, Microsoft then went on to develop its own PMP. In fact, I'd be tempted to piddle in Microsoft's pot by getting MS to pay a hefty licensing fee or suing it, as needs dictated.

    MS will be more likely to license (i.e. "pay money to make the problem go away") knowing that the market leader has stumped up.

  • Given that Apple has about 853m shares outstanding, $100m dollars works out to be $0.12 per share, or 0.18% of their stock price ($67). This shouldn't be a big deal for Apple.
  • by brianford (962398) <bford@isdlab.com> on Wednesday August 23, 2006 @10:05PM (#15967292) Homepage
    Apple should have agreed to license Fairplay to Creative so that their devices could play music from the iTMS. In fact, they should offer to do so for every company that is not currently making a device that rhymes with "boon". I've posted an open letter to Apple which discusses the need to cut Microsoft off from their ability to buy their way into the digital music market. You can read it here. [newsvine.com]
  • Patent 6928433 [uspto.gov]

    The key claim is the following, plus 15 variations on the theme.

    What is claimed is:

    1. A method of selecting at least one track from a plurality of tracks stored in a computer-readable medium of a portable media player configured to present sequentially a first, second, and third display screen on the display of the media player, the plurality of tracks accessed according to a hierarchy, the hierarchy having a plurality of categories, subcategories, and items respectively in a first,
  • Hrm... (Score:2, Interesting)

    by PayPaI (733999)
    Looks like CREAF is on track to lose ~$118 mil this year. [google.com] Coincidence? Suddenly they are only losing $18mil..
  • It's a trap (Score:2, Interesting)

    by vettemph (540399)
    The whole purpose was to legitimize the patent in order to slow down competitor number 3, 4 and 5.

    CHOICE 1: Get the patent squashed, anyone can copy.
    CHOICE 2: Settle in order to legitmize the patent, share the toll booth.

    This is most likely a move to keep sandisk at bay with that new look alike. ...Of course that ALL look alike though.
  • by vitaboy (610992) on Thursday August 24, 2006 @02:28AM (#15968071)
    The settlement terms basically prove it. Regardless of whether Creative's patents were valid or not, Apple just performed a legal jujitsu. It basically allows Apple to use Creative to fight its battles. One, the settlement strengthens the validity of Creative's patents. Creative is now free to go after the likes Sandisk (which has overtaken it in marketshare in the last year) and iRiver. Most importantly, it allows Creative to throw a wrench into Zune's imminent launch. I bet Microsoft never saw this coming. If Creative was a starving pit bull that was going after Apple out of anger, Apple just whipped out a nice juicy steak at the last second, made friends, and is now about to sic Creative the Well-Fed Pit Bull on Sandisk and Microsoft. There's no doubt Apple's lawyers read Creative's lawyer the riot act. Patent battles are super expensive, and with Creative having to simultaneously sue Apple as well as defend against the counter-suit, the whole process would probably take 5 years or more and cost tens of millions of dollars. With Creative's sales shrinking quarter to quarter, it would be hard for the company to keep paying the lawyers over such an extended period of time. Last quarter's results kind of proved that. But I think what really made Creative see the writing on the wall is the sudden appearance of Zune. Zune is the classic Microsoft move of screwing its partners over once they've outlived their usefulness (or in this case, proved totally useless). Creative maybe would have been willing to stick it out were it not for Zune, but with Zune competing directly with Creative's own products, they must have realized the company would be dead and bankrupt in a year, and once the money is gone, so long lawyers! I'm willing to bet that virtually all the terms of this settlement were proposed by Apple. It makes Creative look like a winner when Creative will now be fighting battles on Apple's behalf. It also shows that Apple is serious about not letting the iPod give any ground in terms of marketshare. And it wouldn't surprise me if Creative's "Made for iPod" products quickly ends up outselling Creative's players. And unlike the music players, the accessories will probably be hugely profitable for Creative, which will just make Creative Apple's bitch in reality instead of just symbolically. I can't wait for the next headline, though: "Creative Sues to Stop Microsoft Zune." Steve Jobs IS the new Godfather!
  • by jambarama (784670) <jambarama@@@gmail...com> on Thursday August 24, 2006 @03:09AM (#15968177) Homepage Journal
    Adapted from my blog. [blogspot.com] I know this is blasphemous, but there isn't enough litigation over patents. By this I mean actual court cases, there are plenty of threats. Only 1.5% of all patents are litigated, and only .1% are litigated to trial (of that .1%, over 50% are invalidated). This is far too little. Let me explain.

    We know the level of litigation is too little because of positive externalities associated with litigation. If the accusor loses, invalidating a patent benefits everyone, not just the firm that sues for the invalidation. If the accusor wins, clarity in validity also benefits others. So there is a free riding problem with litigation (especially since it is so costly).

    Lets say I hold a patent on tennis shoes and I expect to make a million dollars from that patent. If another shoe maker named Nike sues me over the patent, how much would I be willing to spend to defend the patent? $999,999. How much would Nike be willing to spend to invalidate the patent? Invalidating the patent doesn't give Nike a monopoly, so assuming in a competitive model there are no (or lower than monopoly) profits for Nike. So Nike would be willing to spend less to invalidate the patent than I would to keep the patent valid. Thus it may in Nike's best interest to just license a completely ludicrous patent. That seems to be what happened here.

    Not only is this litigation costly, but anyone found infringing on a patent in court pays TRIPLE the claimed damages! That is high stakes indeed. To add to this problem, the alleged infringer bears the burden of proof, that the patent is invalid or that they didn't violate the patent. The wording for proof is "clear and convincing evidence," that is strong wording. So it shouldn't be surprising to find that 95% of all defendants settle without going to court.

    A good way to produce more clarifying litigation is to create incentives to litigate. One idea (which I think is a bad one) is to allow the government to challenge patents. A better idea is to offer a bounty on invalidated patents. One problem with the bounty idea is that mostly worthless patents would be invalidated this way, but if you limited the bounty to licensed patents, you could eliminate a lot of this problem. The bounty could be grant the patent to the challenger for a few years, or be a flat rate payment. Lastly, there are public interest groups already doing great work towards this end (such as the EFF and Public Patent Foundation), by funding them with incentives or grants we could improve the situation.

    Another fix is to force firms to litigation. By capping the dollar value of settling, firms my opt for a court remedy rather than an out of court secret agreement. Limiting settling and other forms of collusion makes more information public, which can benefit more people.

    The third option for getting more litigation is to reduce costs of litigation. Removing the 3X payout, decreasing the time in court, and changing the wording from "clear and convincing evidence" to something less strong. Even shifting some of the burden of proof towards the accusor would speed things along. One other option to make litigation more affordable is to penalize accusers for refuted claims--since the general practice is to claim as much as possible and see what sticks (see SCO for an example).

    It is a crying shame that Apple just paid off the patent trolls here. Had they put up the $100 million into a legal fund and gotten this rediculous patent invalidated, it would have benefitted society. Who knows who else will get hit with this silly patent claim now? It isn't Apple's job to benefit society, but as long as we keep feeding the trolls, we'll have to keep paying.
  • In short (Score:4, Insightful)

    by suv4x4 (956391) on Thursday August 24, 2006 @10:54AM (#15970289)
    1. Creative gets awarded silly patent.
    2. Apple uses something that falls under the patent.
    3. Creative sues Apple.
    4. Apple fights back.
    5. Apple fights back.
    6. Apple fights back.
    7. Microsoft announces Zune, which uses something that falls under the same patent.
    8. Apple settles for $100 million and sets a precedent.
    9. Creative uses the precedent to sue Microsoft.

When you make your mark in the world, watch out for guys with erasers. -- The Wall Street Journal

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