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Posted on 11/21/2007 4:57:03 PM PST by Swordmaker
Burst.com, which had charged Apple with using four of its patents in the iPod and iTunes, will get $10 million and will make most of its patents available to Apple
Apple agreed to settle a patent dispute with Burst.com on Wednesday, ending two years of litigation.
Under the agreement, Apple will pay Burst.com $10 million and get access to Burst.com's patent portfolio, with some exceptions, Burst.com said in a press release. Apple won't have access to four of Burst.com's current and pending patents, including three pending patents relating to DVR (digital video recorder) technology. Court costs, expenses, and attorney's fees will reduce the proceeds to Burst.com to $4.6 million.
Burst agreed not to sue Apple over current or pending DVR patents, Burst.com said.
Burst alleged that Apple infringed four patents for transmission of compressed audio and video files in iTunes, iLife, QuickTime, and the iPod.
In 2004, Burst.com asked Apple to license some of its patents, saying they were at the heart of the iPod. In January 2006, Apple sued Burst.com in the U.S. District Court for the Northern District of California, seeking a judgment that the Burst.com patents were invalid and not infringed. Burst.com countersued in April 2006, alleging that Apple infringed four Burst.com patents.
Burst.com settled a similar case with Microsoft for $60 million last year.
Apple and Burst.com officials could not be reached for comment.
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not much money these days.
Considering all of the publicity about this case, $10 million is a pitiful settlement.
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I would love to see these patents, and how obvious they are.
Notice that Burst’s legal fees were almost $4 million.. Wouldn’t surprise me if Apple’s were higher. Another case of corporate blackmail via the courts. Make the cost of fighting high enough, and the defendant is likely to settle just as a stop-loss measure.
What's even more amazing is that the settlement included licensing ALL of the originally disputed patents to Apple in perpetuity AND an agreement on Burst's part not to sue Apple if, in the future, Apple should infringe in the recently granted DVR patent and four more recently submitted patent applications ... all for a paltry ten million dollars!
This is big. I think Apple was close to proving Burst's patents were invalid but decided that was not in their best interests and offered this settlement. Burst agreed, essentially giving away the store to Apple, to maintain the viability of their patents.
The proof of this is the promise not to sue Apple in the future for patents that were not even in the lawsuit! Those were patents they could legitimately license for a good royalty which shows they knew Apple had them over a barrel.
Apple gave Burst a win-win while, in actual fact, they would have lost. Apple paid them a token amount, got the right to use Burst's current and future patents without dispute or future royalties, and maintained Burst's capacity to sue any Apple competitor that might try to use the same patents that Apple could have invalidated! Smart.
Take a look at the previous comment on this thread.
Some interesting speculation in the comments. It is possible that Apple may buy Burst.
That’s $10 million more than they’ve ever made before, eh? ;’)
Sounds like you’re right on the money, SM.
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