Wed Aug 23, 2006 5:27 pm

So, looks like Creative is bailing out of the MP3 player market and getting into iPod accessories instead?

Wed Aug 23, 2006 8:29 pm

Meanwhile MP3 makers like SanDisk and other Asian competitors are rubbing their hands with glee as Apple, Creative (yes, I know they are from Singapore!) get side-tracked by all these lawsuits. Try this in China and you'd be laughed at! It seems whenever a company like Apple becomes 'successful' it gets slowly squashed from within (ie. by American lawyers). Apple , etc. can only sustain such attacks for a while as soon the Chinese manufacturers will compete for IT market share and business (and this is a GOOD THING!) .. but then who will the lawyers try to prosecute for using icons, an interface, etc copyrighted in USA but utilised in China?

The copyright ownership issue is a farce! As Steve Jobs said.. Creative got lucky, they got their application in first.

Wed Aug 23, 2006 10:33 pm

Creative never should have been granted the patent because the interface was hardly innovative, but merely a copy of interfaces used in other mediums, such as Windows Explorer and the Mac OS.

Nonetheless, Apple failed to get the patent overturned at the patent office. Apple may have got the patent overturned in federal court, which can overrule the patent office, but meanwhile it risked having its products seized at the customs office. The customs office would have acted before Apple received its day in court. Moreover, Apple might have successfuly sued Creative over patent infringement, but Creative probably would have been successful in at least temporarily getting Apple's iPod stopped at customs.

Settling lets Apple go forward. Moreover, the above story does not mention one of the most important thing about the settlement. Creative will pay Apple some of its 100 million back if Creative successfuly enforces its patent against other Mp3 player manufacturers. That is what this settlement is really about. Creative will now have the money to go after everybody else manufacturing such players, and those companies will have incentive to settle considering Apple's settlement. It will be interesting if Microsoft will now license Creative's patent. I have not seen a newer MP3 player that does not use the patented interface, so it is likely Microsoft's Zune will use it as well.

However, my personal beleif is a court would have overturned the patent office's desion to award a patent.

Thu Aug 24, 2006 12:09 am

I just hope Creative's iPod accessories suck less than their mp3 players do.

Thu Aug 24, 2006 2:09 pm

I was disappointed last night when I read this since I though the patent was bogus and companies like Creative need to get their butts kicked for abusing the patent system. After thinking about it overnight, I've come to realize that this is (potentially) pure brilliance on the part of Apple. To see why, you first must follow the two possible outcomes to conclusion:

1) After several years of legal fighting, Apple actually loses the lawsuit. As bogus as the patent is, stranger things have happened. Apple is then left with a) a huge legal bill, b) punitive damages that could be on the order of several dollars for every iPod ever sold, and c) an injunction from selling any more iPods unless they license the patent from Creative - and you know that wouldn't come cheap!

2) After several years of legal fighting, Apple wins the lawsuit and Creative's patent is invalidated. Apple probably wouldn't recoup their legal fees since Creative will likely be bankrupt. All Apple wins is the ability to keep selling their product. They have also done all the other mp3 player makers a huge favor by invalidating the patent, allowing them to continue selling their iPod knock-offs.

Now, because of the settlement, let's look at what's likely to happen:

1) Apple continues to sell the iPod, unencumbered.

2) Creative receives a $100M windfall, keeping them in business for several more years.

3) Creative produces iPod accessories, paying back a little to Apple due to "Made for iPod" licensing (which is pretty ridiculous, IMO, but another story...). Creative may even produce some successful products, thus keeping themselves in business a few more years.

4) Creative, having their patent essentially legitimized by Apple (though not in the legal sense), and given $100M to finance their lawyers, goes after all other mp3 players who violate the patent. Many of Apple's competitors will get wrapped up defending themselves. For every competitor, the possible outcomes are the same as the ones I initially listed above for Apple. The end result is that Apple will either lose competitors as they try to defend themselves or, if they ultimately license the patent, Apple will receive money from Creative as per the terms of this settlement (essentially receiving money from their competitors). This may very well apply to Microsoft's forthcoming Zune player, too. Pure brilliance!

Of course, there may be undisclosed/unreported terms of the settlement that prevent any of the above from occurring. Also, an iPod competitor may succeed in overturning the Zen patent, but they'll end up spending a lot of money to do so. We'll have to wait and see...

Fri Aug 25, 2006 9:01 pm

	Guest wrote:
	Looks like Creative realized the money's in iPod accessories since their mp3 player lines suck ass.

Yup. If you can't beat 'em (and Creative has zero chance of ever beating Apple), join 'em. Creative finally gets smart.