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Apple Admits iPod Rips off Creative Innovations, Pays Creative $100M USD

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syadasti

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Apr 15, 2002
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Apple - steal different :rofl:

Press Release Source: Apple Computer, Inc.

Apple & Creative Announce Broad Settlement Ending Legal Disputes Between the Companies
Wednesday August 23, 5:00 pm ET

CUPERTINO, Calif. and SINGAPORE, Aug. 23 /PRNewswire-FirstCall/ -- Apple® and Creative Technology, Ltd. (Nasdaq: CREAF - News) today announced a broad settlement ending all legal disputes between the two companies. Apple will pay Creative $100 million for a paid-up license to use Creative'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 others. In addition, the companies announced that Creative has joined Apple's "Made for iPod" program and will be announcing their own iPod® accessory products later this year.

"Creative is very fortunate to have been granted this early patent," said Steve Jobs, Apple's CEO. "This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation."

"We're very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative," said Sim Wong Hoo, chairman and CEO of Creative. "Apple has built a huge ecosystem for its iPod and with our upcoming participation in the Made for iPod program we are very excited about this new market opportunity for our speaker systems, our just-introduced line of earphones and headphones, and our future family of X- Fi audio enhancement products. We expect that the one-time licensing payment of $100 million will contribute approximately $.85 of earnings per share to our current quarter, ending September 30, 2006."

About Apple

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award- winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store.

About Creative

Creative is a worldwide leader in digital entertainment products for PC users. Famous for its Sound Blaster sound cards and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed ZEN(TM) MP3 players. Creative's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.

NOTE: Apple, the Apple logo, Mac, Mac OS, Macintosh and iPod are trademarks of Apple. Other company and product names may be trademarks of their respective owners.
 

syadasti

i heart mac
Apr 15, 2002
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Apple iPods infringe on Creative's patent for a navigation system used to organize and access music on digital audio players.

This website explains it:

http://www.creative.com/zenpatent/

Here is a timeline:

4/1999 Creative NOMAD flash-based MP3 player (not the first, but Creative's first DAP)

Commercial HDD-Based DAP History
1 - 11/1999 :: Remote Solutions PJB-100, 4.8gb (MP3, USB, 2.5inch disk, Lithium battery, Mass Storage Device support, upgradable drive, removeable/replaceable Lithium battery)

2 - 08/2000 :: Creative Nomad Jukebox, 6gb (uses standard AA batteries, ID3 tag database/organization, WMA & WAV compatibility, MAC compatible, analog/optical Line-in recording to WAV, Dual line-out, on-the-fly playlisting, DSP effect)

3 - 09/2000 :: SSI Neo 25 6gb (IR remote)

4 - 12/2000 :: Archos 6000, 6gb (File/Folder Navigation)

5 - 04/2001 :: Creative Nomad Jukebox C, 6gb

6 - 06/2001 :: SSI Neo Jukebox, 6gb & 20gb

7 - 07/2001 :: Creative Nomad Jukebox, 20gb

8 - 07/2001 :: Archos Jukebox Recorder (USB2, on-the-fly MP3 encoding)

9 - 10/2001 :: Apple iPod v.1 (1.8" Toshiba drive, Firewire, wheeled controller)
 

binary visions

The voice of reason
Jun 13, 2002
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The navigation patent lawsuit(s) have been in process for a while now... Jobs is right, Creative is lucky and just ended up with a good patent early on. I doubt Apple actually "ripped off" anything, they just designed a system that infringed on an existing patent.

Some of their patent lawyers probably need a kick in the pants for not seeing this coming and informing Apple early in the game that their system infringed.
 

syadasti

i heart mac
Apr 15, 2002
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I Are Baboon said:
$100MM / $14BB = 0.7%

I don't think that's going to slow Apple down at all.
Plus Creative has to pay Apple fees for their "Made for iPod" product certification.
 

jonKranked

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Nov 10, 2005
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haha i find this pretty funny. From what I've gathered, Apple legally licensed the technology from Creative, who thought it would never be worthwhile (hence the licensing to Apple). Then they get pissed when Apple makes billions off the iPod.
 

syadasti

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Apr 15, 2002
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jonKranked said:
haha i find this pretty funny. From what I've gathered, Apple legally licensed the technology from Creative, who thought it would never be worthwhile (hence the licensing to Apple). Then they get pissed when Apple makes billions off the iPod.
Actually what happened is Creative wasn't issued the patent until recently and then there were 5 lawsuits from Creative vs. Apple or Apple vs. Creative and then Apple settled with Creative.
 

spincrazy

I love to climb
Jul 19, 2001
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Please try to keep your masturbation to a minimum. We don't want you to rub it off entirely. :)

Do you have stock in Creative?
 

syadasti

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Apr 15, 2002
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spincrazy said:
Please try to keep your masturbation to a minimum. We don't want you to rub it off entirely. :)

Do you have stock in Creative?
I don't own any mp3 players anymore except my Alpine car CD player, PCs, and a Mac.

History shows Apple doesn't innovative - just making that clear. Apple isn't much better than MS when it comes to stealing ideas and passing them off as their own new "exciting" products.
 

spincrazy

I love to climb
Jul 19, 2001
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All biz 'steals'.

I also don't own an iPod or other mp3 player other than my desktop, but I did buy my gf a Nano.

I have some Creative speakers. I think they stole their design from Bose, but I don't care.
 

syadasti

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Apr 15, 2002
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spincrazy said:
All biz 'steals'.
Yes but most don't make smug commercials/ads claiming they "think different" or claim that their competitors are the only ones that copy others ideas.
 

sanjuro

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syadasti said:
I don't own any mp3 players anymore except my Alpine car CD player, PCs, and a Mac.

History shows Apple doesn't innovative - just making that clear. Apple isn't much better than MS when it comes to stealing ideas and passing them off as their own new "exciting" products.
Apple did invent the mouse, which as innovative as Microsoft's creation, DOS.
 

syadasti

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sanjuro said:
Apple did invent the mouse, which as innovative as Microsoft's creation, DOS.
Nice sarcasm but really, Xerox invented GUI with a mouse and Apple copied it...

Early mice

Douglas Engelbart of Stanford Research Institute invented the mouse in 1963 after extensive usability testing. Engelbart's team called it "bug". It was one of several experimental pointing devices developed for Engelbart's oN-Line System (NLS). The other devices were designed to exploit other body movements—for example, head-mounted devices attached to the chin or nose—but ultimately the mouse won out because of its simplicity and convenience.



The first mouse, a bulky device (pictured) used two gear-wheels perpendicular to each other: the rotation of each wheel translated into motion along one axis. Engelbart received patent US3541541 on November 17, 1970 for an "X-Y Position Indicator for a Display System". At the time, Engelbart intended that users would hold the mouse continuously in one hand and type on a five-key chord keyset with the other.
[edit]

Mechanical mice

Bill English invented the so-called "ball mouse" in the early 1970s while working for Xerox PARC. The ball mouse replaced the external wheels with a single ball (that could rotate in any direction). The ball's motion, in turn, was detected using perpendicular wheels housed inside the mouse's body. This variant of the mouse resembled an inverted trackball and was the predominant form used with personal computers throughout the 1980s and 1990s. The Xerox PARC group also settled on the modern technique of using both hands to type on a full-size keyboard and grabbing the mouse as needed.

Modern computer mice took form at the École polytechnique fédérale de Lausanne (EPFL) under the inspiration of Professor Jean-Daniel Nicoud and at the hands of engineer and watchmaker André Guignard. A spin-off of EPFL, Logitech, launched the first popular mice.

The major movement translation techniques are by optical, mechanical and inertial sensors.
 

jonKranked

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syadasti said:
Actually what happened is Creative wasn't issued the patent until recently and then there were 5 lawsuits from Creative vs. Apple or Apple vs. Creative and then Apple settled with Creative.
patent or not they let apple use it before the really knew what a piece of awesomeness they had. or so i've heard.
 

syadasti

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jonKranked said:
patent or not they let apple use it before the really knew what a piece of awesomeness they had. or so i've heard.
I guess you don't get the idea of patents and patent process. Companies have no legal means to protect their IP until a patent is granted - a process that takes years to occur. This is why DW won't go into detail about the dw-link link until his patents are granted.

If you have no patent on your idea, your patent is pending, or the patent has expired, anyone is free to copy it.
 

sanjuro

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syadasti said:
Nice sarcasm but really, Xerox invented GUI with a mouse and Apple copied it...
Well, at least MS invented DOS, right?

Seattle Computer Products (SCP) was a Seattle, Washington computer hardware company. Twenty-two year old Tim Paterson was hired in June 1978 by SCP's owner Rod Brock. In 1980 Paterson wrote the QDOS operating system, later known as 86-DOS, over a four month period. Microsoft purchased a license for the system in December 1980 for $25,000, which it in turn provided to IBM as the first PC operating system, MS-DOS, which IBM adapted as PC-DOS. Subsequently, in July 1981, Microsoft purchased full rights to QDOS for an additional $50,000. However, Microsoft did not disclose it was reselling the system to IBM. As a result, SCP sued Microsoft, and settled for $1 million in 1986. SCP is no longer in business.

Paterson was honored along with Bill Gates with the Stewart Alsop Hindsight Award in 1991.
 

kinghami3

Future Turbo Monkey
Jun 1, 2004
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syadasti said:
It pays to steal - Apple (Xerox) and MS (Apple) are good examples :devil:
Well, it was more like Xerox told Apple, "Here's this GUI thing we've been working on, we don't want it, so you can have it." Microsoft was more like, "Hey, can we borrow a couple prototypes so we can... um... write some software for it (he he he)." I think there's a significant difference. As far as the iPod interface goes, Creative was just lucky to get an early patent on an interface that strangely resembles the browser system that iTunes already had, and that Apple incorporated into their music player. The interface is stupidly simple, and it's hard to believe anyone got a patent on it.
 

syadasti

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Apr 15, 2002
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sanjuro said:
Well, at least MS invented DOS, right?
Hence I said above, "Apple isn't much better than MS when it comes to stealing ideas and passing them off as their own new "exciting" products," and later "Nice sarcasm" :clue:
 

syadasti

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Apr 15, 2002
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kinghami3 said:
Well, it was more like Xerox told Apple, "Here's this GUI thing we've been working on, we don't want it, so you can have it." Microsoft was more like, "Hey, can we borrow a couple prototypes so we can... um... write some software for it (he he he)." I think there's a significant difference.
Neither were original ideas. Both were prototypes from different companies.

Regardless in this case, Apple paid Creative thus they admitted guilt.

Apple many innovations aren't their own:

GUI - Xerox
Portable HDD MP3 Players - Compaq spinoff Remote Solutions in 1999, not Apple in 2001
MP3 broadcasting - Nullsoft in 1998, not Apple in 2004
First 64-bit PC - DEC (and later again before Apple - 1997 and AMD also) a decade before Apple had a 64-bit PC designed as a "cheap" PC to run the new WinNT OS
Konfabulator - Konfabulator in 2003, not Apple Dashboard in 2005
Watson-like functionality added Sherlock and on and on..
 

jonKranked

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syadasti said:
I guess you don't get the idea of patents and patent process. Companies have no legal means to protect their IP until a patent is granted - a process that takes years to occur. This is why DW won't go into detail about the dw-link link until his patents are granted.

If you have no patent on your idea, your patent is pending, or the patent has expired, anyone is free to copy it.

no i know very well how the patent process works. i'll see if i can digg up the article later, but what from what i remember, apple didn't come up the technology on their own, nor did they obtain it by questionable methods from creative. they approached creative about using it and creative at the time had no idea what a goldmine of an idea they had, so they said sure why not go ahead, just pay us for the idea. Then when the ipod exploded and made apple billions creative said d'oh!
 

syadasti

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Apr 15, 2002
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sanjuro said:
Well at least Shimano invented the bicycle.
The difference is that Shimano isn't known for childish references to the competition and claims of being the first and only innovator. Does the president of Shimano attend large annual public conferences were he spouts his silly smug propaganda?
 

binary visions

The voice of reason
Jun 13, 2002
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Maybe syadasti is really Steve Jobs and he's got some kind of self-loathing personality disorder :think:

I can't really explain the obsessiveness any other way...
 

blue

boob hater
Jan 24, 2004
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binary visions said:
Maybe syadasti is really Steve Jobs and he's got some kind of self-loathing personality disorder :think:

I can't really explain the obsessiveness any other way...
I agree with Syadasti...Apple's stuff doesn't suck, just their corporate policies and neo-liberal hipster propaganda. I just wish I could stab their marketing dept for making people believe Apple is counter-culture and "different".

That said, I think I'm getting an iMac for my next PC.
 

D_D

Monkey
Dec 16, 2001
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The whole idea of innovation with mp3 players is bit suspect. Especially in the early years technology was the real limitation. Any 13 year old with an intreast in technology could come up with the ideas. It was just a matter of waiting for technology to catch up and make the ideas possible.
 

sanjuro

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syadasti said:
The difference is that Shimano isn't known for childish references to the competition and claims of being the first and only innovator. Does the president of Shimano attend large annual public conferences were he spouts his silly smug propaganda?
Seriously, Shimano is a company which current incantation started post WW2, whereas Apple is a post hippie, pre-Internet boom company.

Do you think Yoshizo Shimano was raised to run his mouth, like Jobs obviously was?




While we might think of cycling as a young business, companies like Campy, Shimano, and SRAM (originally Sachs) are old school as they come...
 

sanjuro

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blue said:
I agree with Syadasti...Apple's stuff doesn't suck, just their corporate policies and neo-liberal hipster propaganda. I just wish I could stab their marketing dept for making people believe Apple is counter-culture and "different".

That said, I think I'm getting an iMac for my next PC.
I will say this, I take the train with many Apple people, and I can tell you the way I dress for my corporate job is much different than Apple employees look.

However, since I think dressing your lifestyle is a bad move, when one of them acts up, I always think, "Wait'll they get a load of ME!"

 

binary visions

The voice of reason
Jun 13, 2002
21,653
402
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blue said:
I just wish I could stab their marketing dept for making people believe Apple is counter-culture and "different".
You guys are sad.

MOST marketing campaigns are based in fantasy. Apple's is no different.

It's an extremely effective marketing campaign, and it's very good at depriving the sheep from their money. I applaud Apple.
 

sanjuro

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binary visions said:
You guys are sad.

MOST marketing campaigns are based in fantasy. Apple's is no different.

It's an extremely effective marketing campaign, and it's very good at depriving the sheep from their money. I applaud Apple.
Marketing is marketing. I didn't buy my bikes because of ads in a magazine, and I didn't buy my Ipod because of the commericals.

I thought the Ipod was superior in many ways, and I feel satisfied, even though I paid the premium.
 

binary visions

The voice of reason
Jun 13, 2002
21,653
402
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sanjuro said:
Marketing is marketing. I didn't buy my bikes because of ads in a magazine, and I didn't buy my Ipod because of the commericals.

I thought the Ipod was superior in many ways, and I feel satisfied, even though I paid the premium.
Good. That wasn't directed at people who have made an informed decision based on their own criteria. Hell, I don't care if you like the iPod because it's white or it has a fun pink sparkly accessory, as long as there's a reason.

You can't argue that Apple sells a lot of product to people who have purchased it based on their marketing, though.
 

spincrazy

I love to climb
Jul 19, 2001
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apple does not make their ads. tbwa chiat day does - LA office.

I work for the NY headquarters, but apple is not in my office.
 

syadasti

i heart mac
Apr 15, 2002
12,721
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binary visions said:
It's an extremely effective marketing campaign, and it's very good at depriving the sheep from their money. I applaud Apple.
Do you applaud companies for promoting the "EXTREME" sports lifestyle/image?

Most people dislike marketing bull**** or progapanda in any form. Why would you admire companies or for that matter politicians/governments who use such underhanded devices effectively?
 

binary visions

The voice of reason
Jun 13, 2002
21,653
402
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Government propaganda is different, that is public figures using underhanded measures to change public opinion on issues that directly impact their lives and their country.

Are you really comparing a marketing campaign for an MP3 player or "extreme" potato chips to government propaganda? :rolleyes: Way to have perspective.

If an effective marketing campaign seperates a few sheep from their money, big deal. It's what makes the world go 'round.
 
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