Apple pays $10m to end iTunes patent clash

Burst.com suite settled

By Tony Smith • Get more from this author

Posted in Financial News, 22nd November 2007 09:03 GMT

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Apple has agreed to pay Burst.com $10m to settle the patent infringement challenge the smaller US company launched against it in April 2006.

Back then, Burst.com claimed Apple's iTunes Music Store, QuickTime streaming software and the iPod all incorporate without permission technology detailed in four patents held by Burst.com: 4,963,995; 5,995,705; 5,057,932 and 5,164,839. The IP covers the transmission of compressed audio and video files over the net.

Apple was clearly aware of the patents: earlier in 2006, before Burst.com's lawsuit, Apple asked the US court to declare Burst.com's patents to be invalid and Apple's products not to infringe them.

The Apple case followed Burst.com's win against Microsoft on similar grounds. It sued the software giant in June 2002. By 2005, however, the two companies had reached an out-of-court settlement that saw Microsoft pay Burst.com $60m for the right to use the latter's technology.

Apple's got off lightly then, paying a sixth of what MS did - less if you take the past two year's inflation into account - for essentially the same rights: to use Burst.com's current technology portfolio with the exception of some digital video recorder IP and other patents that are pending. However, Burst.com promised not to sue Apple in relation to these exceptions and it will pick up both parties' costs.

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