Today’s Links: Apple pays $100M to settle Creative lawsuits (WTF!)

Creative Apple
From the ValleySchwag Hoedown by Laughing Squid

10 thoughts on “Today’s Links: Apple pays $100M to settle Creative lawsuits (WTF!)

  1. With regards to the Apple/Creative lawsuit, I don’t know if I can agree that Creative was being a complete bad guy.

    From :

    “In 2001, Apple approached Creative about licensing the technology or spinning off the portable-device line into a new company with Apple as investor. (You know the rest of that story.) Creative applied for the patent in question in 2001, and it was granted in August 2005.”

    If the above is true, it sounds like Apple went ahead and created the iPod after their deal with Creative fell through. If Apple could demonstrate that they had prior art in the iPod, then Creative’s suit would not stand in court. It doesn’t seem from reports that Apple took that stance so it can be guessed that Creative did have a valid claim to the patent.

    Say what you will about the fact that Creative is only suing Apple because the latter is far more successful and it only wants more money. If I was a for-profit business that is responsible to my employees as well as my shareholders, I may very well do the same thing.

    I think there’s a separate issue of the patent system being broken, thus allowing companies like Creative to take advantage of it. They need to fix that so that stuff like this won’t happen. To borrow a tired cliche, “don’t hate the playa, hate the game”.

  2. Biao: Could be true, but last I heard about the Creative patent, it was applied for only after Apple started selling iPods. Which goes to show that the patent was not only up for grabs then, but puts into question who really came up with the idea in the first place. The U.S. Patent system is flawed… exploits like that are far too common. Either way I’m glad Apple managed to settle this so they could carry on innovating while Creative (like most other companies), simply follow.

  3. Kevin I know that you’re pro-apple, but I think this time round Creative really deserved to win the lawsuit.

    Its a grey area and in terms of this, I think both companies have equal opportunities. If Apple tried to approach Creative in 2001 as said by, then we have a clear winner.

    Alas, wasted chances in not buying more Creative stock.

  4. Su: To each his own ­čÖé

    I don’t think it’s just a matter of me being pro-Apple, but of Creative’s attitude since day one. The fact of the matter is that Creative was faster in filing a patent. Since then, Apple has been quick to file patents even for fictional product ideas. As many have said, Creative has won this war, but it has lost the battle. The Singapore company is now behind Sandisk in terms of mp3 player marketshare.

  5. Dear Kev,

    sorry i took a while to reply, assignments can be a bitch. i found some hotels, that are less than AUD 100 a night, but you would have to book through STA i believe.

    with regards to this issue:

    it’s not a huge problem of the United States, the Patents Act was finally changed last year such that people who patents first will get the rights to it first, rather than the first-to-create system (although creators do still have limited rights to disclaim it i am still quite blurry about that aspect though).

    it’s just sad that a company like creative, with such a name as well, has to resort to such measures to have a “winning” situation.

  6. Yeah, I guess Creative hasn’t been playing nice to Apple.

    But I was constantly reminded on how Jobs’ was focussing most of his keynote address in WWDC06 in putting Vista down. I know that’s irrelevant, but looking at how Sim keeps saying that his mp3s will be the “iPod Killers”, I can definitely see some bitch mode similarities here between Jobs and Sim.


  7. In my opinion, there is no ethics to speak of in business. The aim of the directors of the company is to maximise the return to the shareholders’ funds.

    Creative by filling a lawsuit is stepping into a slow, long and possibly never ending cycle in the legal system. Apple could appeal and perhaps win, and creative would appeal and win and so on untill they reach the highest court of appeal. This could literally take years, and the winner is ultimately the one who has the most cash to pay for the legal fee during the process. How much of the $100m will be left after deducting the legal fees, as we know lawyers charge by the hours/minutes. We also have to consider the time value of money, the amount paid during this legal process could be invested in other areas which would possibly generate higher future cash flow.

    I applaud Apple for paying up that pocket change (relatively compared to number of ipods they sold since the 1st generation) and move on. Being able to pay off 100million in cash boost confidence in both current shareholders and potential investor that the firm is not only asset rich but cash rich as well.

    On a side note. this could be consider an expensive advertising expense to be charge to Apple balance sheet. Not that iPod is not famous enough, with the lawsuit hitting the headlines of the media, more people will know of Apple.

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