Apple Countersuit Says Creative Ripped Off iPod Tech

Apple (Nasdaq: AAPL) has filed a countersuit against Creative Technology, a Singapore-based company that claimed in its own earlier filing that Apple infringed on its patent for the content search technology used in its Zen MP3 media player.

In its countersuit, Apple maintains that it is Creative Technology that has infringed four Apple patents for technologies used in its iPod display and interface.

A Common Strategy

Such tit-for-tat strategies are commonplace in copyright disputes, especially when the stakes are so high.

In April, Burst.com filed a countersuit against Apple's iTunes Music Store, iTunes software, the iPod devices and Apple's QuickTime Streaming products for infringement of four of its patents.

That was in response to an earlier suit filed by Apple seeking a declaration that Burst's media delivery patents are invalid.

That case is still pending.

Creative Technology was granted a patent for the technology it claims Apple infringed in 2005, after applying for the patent in 2001.

That same year, Creative and Apple reportedly discussed the possibility of Apple licensing Creative's technology, as well as possibly spinning off Creative's line of MP3 players.

Creative Labs filed its suit in the U.S. District Court in San Francisco, seeking an injunction and unspecified damages.

Because it is a foreign-based company, it also was able to file a complaint with the U.S. International Trade Commission, which could conceivably block imports of the iPod if it chose to do so.

No Impact

The realization of such an implausible scenario would likely be the only way the litigation against Apple could have an immediate impact on its media player market share.

"The lawsuits alone won't have any effect on Apple other than the money it has to spend on lawyers' fees," Yankee Group analyst Mike Goodman told MacNewsWorld. "How the suits get settled though, could."

If recent lawsuits against big name Web commerce firms are any guide, consumers wedded to the iPods-iTunes music ecosystem have little to worry about. Injunctions, while threatened, have rarely been applied. Also, a recent Supreme Court decision has given judges more discretion over ordering injunctions.

Even fledgling technologies, such as XM Satellite Radio's (Nasdaq: XMSR) Inno player, which has been challenged by the Recording Industry Association of America for "massive wholesale infringement" and fair use violations of its copyrighted content, are at little risk that consumers might shun the device.

When asked if consumers might hesitate to plunk down US$400 on a gadget that could fall under an injunction, Goodman said the number of consumers aware and concerned about this risk is so small that it is essentially meaningless.

"Companies know this is just a part of business," Goodman said.