Apple to pay Creative $100mn for use of iPod

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

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

"We're very pleased to have reached an amicable settlement with Apple," Sim Wong Hoo, chairman and CEO of Creative, said.

"We expect that the one-time licencing payment of $100 million will contribute approximately $0.85 of earnings per share to our current quarter," he added.

Creative Technology had asked a US court to ban Apple from selling or marketing its iPods in the US. Creative alleged that the navigational menu used for finding and playing music on the iPod violated the patent for its own Zen MP3 player.

It had applied for the patent in 2001, which was granted in August 2005 and has since been threatening legal action.

Apple launched the iPod in 2001, and now has 72% of the US portable MP3 player market while Creative has less than 10%, according to research group NPD.

"This settlement resolves all our differences with Creative including the five lawsuits currently pending between the companies," Apple CEO Steve Jobs said.