Things really aren't going Apple's way just at the moment. It's having to restate its earnings going back some time because there are queries about some of its stock options having been backdated; iPod sales fell quarter-on-quarter; and now, it's decided not to fight Creative Labs in the lawsuit that the latter brought alleging that the iPod's menu system infringed Creative's patent, filed a few months before the first iPod appeared.
Apple had originally aimed to fight fire with fire, launching a series of lawsuits against Creative in response to the first. However, Creative became increasingly inventive in the legal row, escalating it to the level where Apple might have been unable to import the product into the US. That, of course, might have affected sales ever so slightly.
Now, it's over, and Creative is $100m richer and gets some bragging rights. From Reuters:
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," Jobs added. Creative, the world's second-largest maker of MP3 music players after Apple, sued Apple in May alleging the Cupertino, California-based computer maker had infringed a patent on its "Zen" player.
Jobs said further that the settlement "resolves all of our differences with Creative."
We just love that "very fortunate". It reminds us of the golfer Gary Player, who (the story goes) holed out from a difficult position. "That was lucky!" exclaimed a spectator. Player looked at him. "The more I practise, the luckier I get," he shot back. And with patents, the more (and earlier) you file, the more fortunate you get. (We couldn't see the picture of the lemon that Jobs was surely sucking, but we can imagine it.)
Will this help Creative? Its shares rose $1.50 to $7.50, but it showed a $12m loss in its latest quarter and is "targeting" profit. Apple, with billions in the bank, can afford to suck the lemon on this one. As the Japanese say, rich men should not pick quarrels. Now, about those stock options...
