Apple Computer announced it would pay Singapore-listed Creative Technology 100 million dollars to settle a dispute over patented technology used in iPod and Nano MP3 players.
The deal ended a budding legal battle that began earlier this month after Creative was awarded what it referred to as a "Zen patent" on technology used to select and sort songs in its Zen MP3 player.
Creative went to US court, and the US International Trade Commission, to accuse Apple of infringing on its patent by using the technology in iPod and Nano players.
"Creative is very fortunate to have been granted this early patent," Apple chief executive Steve Jobs said in a statement.
"This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation."
Apple would pay Creative 100 million dollars for a license to use the technology and would be able to recover some of the money if Creative licensed the patent to others, according to the companies.
Under the terms of the settlement, Creative, an Apple rival in the MP3 player market, would also begin marketing its own line of iPod accessories as part of Apple's "Made for iPod" program.
"We're very pleased to have reached an amicable settlement with Apple and to have opened up significant new opportunities for Creative," said Creative chairman and CEO Sim Wong Hoo.
"Apple has built a huge ecosystem for its iPod and with our upcoming participation in the Made for iPod program we are very excited about this new market opportunity."
Creative expected the licensing windfall to boost its current fiscal quarter earnings by 85 cents per share.
Creative settles patent dispute for 100-mln-dollar bite of Apple