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Apple bites back at Creative
By Jim Welte - MP3.com
May 19, 2006 at 11:29:00 AM | more stories by this author

iPod giant countersues rival, saying company's MP3 players infringe on four of its own patents.

On the same day that Creative Technology filed a patent infringement lawsuit against Apple this week, the iPod maker was filing a less-publicized lawsuit of its own.

The patent battle begins. The patent battle begins.

Right back at Creative.

Apple filed its lawsuit Monday in District Court in Wisconsin, claiming that Creative's MP3 players infringe on four of its patents for user-interface systems on the iPod. The move is seen as a counter to Creative's lawsuit and federal trade commission complaint, filed Monday.

The countersuit escalates a battle over the technology behind the competing lines of MP3 players, but it is unclear if what will likely be a long legal fight will have any impact on the iPod-dominated competition between the companies.

The iPod controls 77 percent of the US market, compared with less than 10 percent for Creative. In 2005, Creative sold 8 million players worldwide, compared with 32 million sold by Apple, according to market research firm iSuppli.

In its lawsuit, Apple claims Creative Labs, the US division of Creative Technology, infringes four patents in its portable digital players.

Apple has not commented further on the complaint, but Creative officials said they were surprised by the move.

"Creative proactively held discussions with Apple in our efforts to explore amicable solutions," Phil O'Shaughnessy, a spokesman for Creative, told Bloomberg News. "At no time during these discussions or at any other time did Apple mention to us the patents it raised in its lawsuit."

In its own patent infringement filings, Creative is seeking an order to block imports of the iPod, most of which are made in China. A lawsuit the company filed against Apple in District Court in San Francisco is likely to be put on hold while its complaint with the US International Trade Commission is heard.

Industry experts have said this battle could come down to whether Creative is able to survive what will likely be a long, exhausting court fight. The company trails far behind Apple in the MP3 player market, and as it continues to lose money, it filed a patent infringement lawsuit against Apple earlier this month.

Meanwhile, its stock is down more than 63 percent, from a high of $15.82 in January 2005. Shares in the company are down another 1 percent today, to $5.78, in midday trading.

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1 Comment

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This got to be a hot topic!
Posted 05/20/2006 8:32am
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