Apple settles Burst.com patent suit for $10 million

[AppleInsider]

Apple Inc. on Wednesday called a truce in the feud between itself and Burst.com by agreeing to pay a $10 million lump sum in exchange for protection from current and future lawsuits.

Burst.com will collect approximately $4.6 million after factoring in legal fees and other expenses associated with the April 2006 complaint, the company says in its announcement.

In return, the streaming media firm will grant Apple the right to use most of its patent portfolio, much of which covers the process of compressing and sending data across a network. Apple will also be shielded from any potential lawsuits that may arise from four additional Burst patents that have not been shared between the two companies, three of which are related to digital video recorders and have yet to be granted.

The move puts a halt to a bitter legal battle that began in 2004, when Burst claimed that some of its media patents formed the basis of the iPod. Apple launched a preemptive lawsuit against Burst in the District Court of Northern California in January of 2006 to try and invalidate the patents. Burst promptly responded by countersuing Apple in April of the same year, accusing the Cupertino, California-based firm of infringement by refusing to license four cornerstone patents it says are violated by the iPod and iTunes. This last action ultimately prompted Wednesday's settlement.

The plaintiff has largely enjoyed success throughout the entire legal process, setting a precedent in 2005 by winning a $60 million settlement from Microsoft after a patent dispute regarding Windows Media Player's transmission of music and video. In May of this year, a Markman Hearing meant to clarify the terms of the lawsuit turned against Apple and allowed most of Burst's definitions to stand for a potential trial, giving the latter the upper hand in attempts to force a settlement.

Neither Apple nor Burst have provided additional commentary on the outcome.[ View this article at AppleInsider.com ] (http://www.appleinsider.com/article.php?id=3446)

[MsNly]

Thats just pocket change to Apple

[Ireland]

I suppose it worked out better than the Creative® deal ;)

[solipsism]

I suppose it worked out better than the Creative® deal ;)
Hell yeah it did.

[Frank777]

iTunes movie rentals and a seriously upgraded AppleTV just became a lot more likely at MWSF.

[solipsism]

iTunes movie rentals and a seriously upgraded AppleTV just became a lot more likely at MWSF.

How does the Burst settlement help that?

[Frank777]

How does the Burst settlement help that?

The patents in question involved streaming and the pending patents are for DVR capabilities.

Cringley had a big piece on the lawsuit about a year ago that explained it in detail, but this (http://www.pbs.org/cringely/predictions/bob/2006/prediction_bob_20060104_000500.html) is all I could find right now.

[Ireland]

The patents in question involved streaming and the pending patents are for DVR capabilities.

Cringley had a big piece on the lawsuit about a year ago that explained it in detail, but this (http://www.pbs.org/cringely/predictions/bob/2006/prediction_bob_20060104_000500.html) is all I could find right now.
Cringley is a crazy man though.

[DisneyEcho]

Now bring on the camcorder app in iPhone with direct uploade to YouTube.

[melgross]

This settlement is really a "Get out of Jail Free card" for Apple.

[digitalclips]

Amazingly small amount given they were wining it seems, I am surprised it was accepted. However as an AAPL share holder I am thrilled.

[ricksbrain]

Amazingly small amount given they were wining it seems, I am surprised it was accepted. However as an AAPL share holder I am thrilled.

MS paid $60million several years ago. This suggests to em that Apple's lawyers convinced them that a lengthy legal battle would all but eat up any award they may have been granted down the road.

I had always looked at this as part of why movies haven't really taken off as much through iTunes, aside from the content producers. I would guess that now, the rental/streaming service can actually get off the ground.

[alek_2]

Now bring on the camcorder app in iPhone with direct uploade to YouTube.

Sweet!

[smee]

This settlement is really a "Get out of Jail Free card" for Apple.

Yip, lol.
It's nothing to Apple though, Steve's all like "$10mill, oh nooooo problem"... :lol:

[SpamSandwich]

This settlement is really a "Get out of Jail Free card" for Apple.

No kidding. Can't figure out why they settled for so little, but hey, I'm not complaining.

[solipsism]

No kidding. Can't figure out why they settled for so little, but hey, I'm not complaining.

Cringely can't figure it out either.• http://www.pbs.org/cringely/pulpit/2007/pulpit_20071122_003480.html

[SpamSandwich]

Cringely can't figure it out either.• http://www.pbs.org/cringely/pulpit/2007/pulpit_20071122_003480_comments.html

Here's the correct story link. (http://www.pbs.org/cringely/pulpit/2007/pulpit_20071122_003480.html)

I think maybe Apple entered into an extended licensing deal with Burst including payments that would be tied to iTunes video rentals or sales, or Apple may have promised to buy Burst and their patents. The deal would have huge ramifications if that's the case.

[solipsism]

Here's the correct story link. (http://www.pbs.org/cringely/pulpit/2007/pulpit_20071122_003480.html)

Thanks.

[melgross]

Here's the correct story link. (http://www.pbs.org/cringely/pulpit/2007/pulpit_20071122_003480.html)

I think maybe Apple entered into an extended licensing deal with Burst including payments that would be tied to iTunes video rentals or sales, or Apple may have promised to buy Burst and their patents. The deal would have huge ramifications if that's the case.

I also find it odd that there would have been any statement about the one patent and three others that have yet to be issued.

Why is that? There was actually NO need to mention them at all, if Apple is not already infringing the one issued, and of course, can't be accused of infringing any that have no yet been issued.

If they did some other deal, then there was no need to mention it at this time. This is very strange

[mdriftmeyer]

MS paid $60million several years ago. This suggests to em that Apple's lawyers convinced them that a lengthy legal battle would all but eat up any award they may have been granted down the road.

I had always looked at this as part of why movies haven't really taken off as much through iTunes, aside from the content producers. I would guess that now, the rental/streaming service can actually get off the ground.

Best observation yet; and one that is completely professional and devoid of taunting.

I'm looking forward to the next AppleTV/DVR.

[solipsism]

I'm looking forward to the next AppleTV/DVR.

I don't see Apple releasing a DVR. This would severely hurt iTunes Store TV Show purchases and piss off the supporting studios.

As for iTunes Store movie rentals I see the major hurdle being one with the studios, not with some Burst patents that may or may not have been violated.

[mdriftmeyer]

I don't see Apple releasing a DVR. This would severely hurt iTunes Store TV Show purchases and piss off the supporting studios.

As for iTunes Store movie rentals I see the major hurdle being one with the studios, not with some Burst patents that may or may not have been violated.

How would this piss off the studios?

Most people won't buy the Apple DVR just because it's Apple. Comcast, DirecTV, DISH, Time Warner, Cox, etc., all have their own DVR products with their program packages.

People who have DVRs already record shows and still use iTunes for their iPod/iPod Video/iPod Touch, etc.

This won't hurt the iTunes store. This will drive more sales of Movies and with different packaging options by the Studios they can provide other premium packages in iTunes than just last week's TV Show.

The writer's strike is hurting the studios, not Apple.

[sachxn]

Atleast now we can expect some rise in share prices of Apple.

Sachin (http://qtp.blogspot.com)

[SpamSandwich]

Atleast now we can expect some rise in share prices of Apple.

Sachin (http://qtp.blogspot.com)

Apple has mainly just been following the overall tech sector, which has fallen mainly due to irrational fears.

[addabox]

In the commentary on the Cringely post, there's an intriguing idea: the settlement included some kind of tacit support from Apple for Burst to go after other players; especially Tivo (I think that the Creative settlement was regarded in that light, by some).

The idea being, that when the Burst lawsuit erodes Tivo's value, Apple moves in, buys up Tivo, then pays Burst the license fees specifically excluded from their current settlement.

Apple gets its already-entrenched DVR biz at a discount, Burst gets their money, everybody's happy.

I didn't say it made any sense, I just said it was intriguing.

[melgross]

In the commentary on the Cringely post, there's an intriguing idea: the settlement included some kind of tacit support from Apple for Burst to go after other players; especially Tivo (I think that the Creative settlement was regarded in that light, by some).

The idea being, that when the Burst lawsuit erodes Tivo's value, Apple moves in, buys up Tivo, then pays Burst the license fees specifically excluded from their current settlement.

Apple gets its already-entrenched DVR biz at a discount, Burst gets their money, everybody's happy.

I didn't say it made any sense, I just said it was intriguing.

Burst doesn't ned Apple's approval for anything. Why would they need that?

Supposedly, Creative was given the $100 million to not only settle the suit, but to help finance suits against others, which doesn't seem to have happened.

But what Burst got from Apple wouldn't go very far.

[MacGregor]

Burst's "win" of $10 million sounds like Dr. Evil in its lack of magnitude.

[SpamSandwich]

Burst doesn't ned Apple's approval for anything. Why would they need that?

Supposedly, Creative was given the $100 million to not only settle the suit, but to help finance suits against others, which doesn't seem to have happened.

But what Burst got from Apple wouldn't go very far.

Regarding the Creative deal with Apple: Why in the world hasn't Creative gone after other companies that are clearly infringing on the very same patents as Apple? Is it because in reality Creative's patent wasn't as rock-solid as it seemed? Creative could have just as easily squeezed more millions out of other companies based on Apple's precedent. I don't understand what happened here.

[SpamSandwich]

Burst's "win" of $10 million sounds like Dr. Evil in its lack of magnitude.

Considering that Burst is reportedly a "3 man" shop, they were probably easy to convince that they would never win in a protracted legal battle against Apple.

[melgross]

Regarding the Creative deal with Apple: Why in the world hasn't Creative gone after other companies that are clearly infringing on the very same patents as Apple? Is it because in reality Creative's patent wasn't as rock-solid as it seemed? Creative could have just as easily squeezed more millions out of other companies based on Apple's precedent. I don't understand what happened here.

I don't think anyone understands. Apple could not have made an agreement with them to sue. That wouldn't be kosher. But some understanding could have been hinted at off hand.

But, maybe not. This could all be the imagination of those who first came up with that idea. Apple is by far the biggest, so maybe it's simply that they could have gotten far more out of them, and the rest don't pay to go after.

[melgross]

Considering that Burst is reportedly a "3 man" shop, they were probably easy to convince that they would never win in a protracted legal battle against Apple.

I don't know, MS has far more money than Apple does, and they settled for $60 million.