Creative Sues to Halt iPod Sales - 18 May 2006

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In the News

Creative Sues to Halt iPod Sales

by Paul Thurrott, [email protected]

On Monday, MP3 maker Creative Technology sued Apple Computer for patent infringement and asked the United States International Trade Commission (ITC) to require Apple to stop selling its hugely successful iPod. Creative is currently a distant second in the MP3 player market, which Apple's iPod dominates. Creative is also seeking unspecified damages.

Creative reports that it applied for its so-called Zen patent in August 2005. The patent-- nicknamed for Creative's Zen MP3 players--covers "[Creative's] invention of the UI used by most portable digital-media players," including Apple's iPod. Creative was a pioneer in the MP3 player market and was the first company to ship a hard-drive-based MP3 player.

"The iPods and iPod Nanos sold by Apple are specifically configured to access and display music loaded by the user in ways that infringe the asserted patent," Creative's complaint reads. Indeed, Apple's iPod UI is suspiciously similar to the UI Creative used in its first hard-drive-based player, the Nomad Jukebox, which shipped in January 2000, almost two years before the first iPod launched.

According to Creative, Apple approached it in early 2001 to investigate how the two companies could work together. Apple asked to license Creative's technology and suggested that the companies spin off Creative's MP3 player assets, but Creative declined both offers. In October 2001, Apple launched the iPod line of MP3 players, which had a slow start but began selling well about a year and a half later. The iPod featured a Nomadlike UI but in a much smaller form factor.

Apple currently controls more than 70 percent of the MP3 player market in the United States and has sold almost 60 million units worldwide since its 2001 launch. Creative, with the number-two MP3 player, controls less than 10 percent of the market.

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