ST, Aug 24, 2006
SAN FRANCISCO - Apple Computer said it will pay US$100 million for a licence to use Creative Technology's patented technology in its iPod music player, settling all legal disputes between the two companies.
US-traded shares of Singapore-based Creative surged 25 per cent in extended trading following the announcement. Apple shares slipped 0.2 per cent.
Apple Chief Executive Steve Jobs said the agreement ends five lawsuits between the companies 'and removes the uncertainty and distraction of prolonged litigation'.
'Creative is very fortunate to have been granted this early patent,' he added.
Creative, the world's second-largest maker of MP3 music players after Apple, sued Apple in May alleging the California-based computer maker had infringed a patent on its 'Zen' player over technology for navigating through songs on the popular iPod digital music player.
Apple in June counter-sued, while Creative took the case to the US International Trade Commission and sought a permanent cease-and-desist order against Apple.
Settlement 'amicable'
Mr Jobs said further that the settlement 'resolves all of our differences with Creative.'
Creative Chairman and CEO Sim Wong Hoo called the settlement 'amicable'.
The one-time licensing payment would add 85 cents per share to Creative's earnings in the current quarter, which ends Sept 30, he said.
The settlement also allows Apple to recoup a portion of its payment if other electronics companies license Creative's technology.
Shares of Apple shed 28 cents to US$67.12 in extended trade after the settlement announcement. The stock had closed down 31 cents at US$67.31 in regular trading on Nasdaq.
Creative shares rose US$1.49 to US$7.50 in extended trading after closing down 5 cents at US$6.01 on Nasdaq. -- REUTERS, AP
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