Apple settles Burst.com patent suit for $10 million

***AppleInsider*** · 11-21-2007, 10:58 PM

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 ]

MsNly · 11-21-2007, 11:12 PM

Thats just pocket change to Apple

Ireland · 11-21-2007, 11:17 PM

I suppose it worked out better than the Creative® deal

solipsism · 11-21-2007, 11:21 PM

Quote:

Originally Posted by Ireland

I suppose it worked out better than the Creative® deal

Hell yeah it did.

Frank777 · 11-21-2007, 11:54 PM

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

solipsism · 11-21-2007, 11:59 PM

Quote:

Originally Posted by Frank777

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

How does the Burst settlement help that?

Frank777 · 11-22-2007, 12:10 AM

Quote:

Originally Posted by solipsism

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 is all I could find right now.

Ireland · 11-22-2007, 12:42 AM

Quote:

Originally Posted by Frank777

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 is all I could find right now.

Cringley is a crazy man though.

DisneyEcho · 11-22-2007, 01:09 AM

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

**melgross** · 11-22-2007, 02:28 AM

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

digitalclips · 11-22-2007, 09:01 AM

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 · 11-22-2007, 09:35 AM

Quote:

Originally Posted by 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.

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 · 11-22-2007, 12:03 PM

Quote:

Originally Posted by DisneyEcho

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

Sweet!

smee · 11-22-2007, 12:12 PM

Quote:

Originally Posted by melgross

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"...

SpamSandwich · 11-22-2007, 02:07 PM

Quote:

Originally Posted by melgross

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 · 11-22-2007, 02:13 PM

Quote:

Originally Posted by SpamSandwich

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/2...22_003480.html

SpamSandwich · 11-22-2007, 02:20 PM

Quote:

Originally Posted by solipsism

Cringely can't figure it out either.

• http://www.pbs.org/cringely/pulpit/2..._comments.html

Here's the correct story link.

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 · 11-22-2007, 02:22 PM

Quote:

Originally Posted by SpamSandwich

Here's the correct story link.

Thanks.

**melgross** · 11-22-2007, 04:43 PM

Quote:

Originally Posted by SpamSandwich

Here's the correct story link.

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 · 11-22-2007, 06:01 PM

Quote:

Originally Posted by ricksbrain

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 · 11-22-2007, 06:25 PM

Quote:

Originally Posted by mdriftmeyer

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 · 11-23-2007, 02:13 AM

Quote:

Originally Posted by solipsism

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 · 11-23-2007, 05:21 AM

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

Sachin

SpamSandwich · 11-23-2007, 04:31 PM

Quote:

Originally Posted by sachxn

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

Sachin

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

addabox · 11-23-2007, 05:51 PM

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** · 11-23-2007, 11:26 PM

Quote:

Originally Posted by 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.

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 · 11-24-2007, 04:06 PM

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

SpamSandwich · 11-25-2007, 05:37 PM

Quote:

Originally Posted by melgross

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 · 11-25-2007, 05:38 PM

Quote:

Originally Posted by MacGregor

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** · 11-26-2007, 01:58 AM

Quote:

Originally Posted by SpamSandwich

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** · 11-26-2007, 01:59 AM

Quote:

Originally Posted by SpamSandwich

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.

11-21-2007, 10:58 PM	#1
*AppleInsider* Kasper's Automated Slave Join Date: Nov 1997 Posts: 6,154	Apple settles Burst.com patent suit for $10 million 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 ]

11-21-2007, 11:12 PM	#2
MsNly Registered User Join Date: Aug 2007 Location: Earth Posts: 258	Thats just pocket change to Apple "Programming today is a race between software engineers striving to build bigger and better idiot-proof programs, and the Universe trying to produce bigger and better idiots. So far, the Universe is winning." -Rick Cook

11-21-2007, 11:17 PM	#3
Ireland Registered User Join Date: Feb 2006 Location: Ireland Posts: 8,561	I suppose it worked out better than the Creative® deal Collecting my SSD iMac Fry-die. :D

11-21-2007, 11:54 PM	#5
Frank777 Registered User Join Date: Apr 2002 Location: Toronto Posts: 3,852	iTunes movie rentals and a seriously upgraded AppleTV just became a lot more likely at MWSF. The evil that we fight is but the shadow of the evil that we do.

11-22-2007, 01:09 AM	#9
DisneyEcho Registered User Join Date: Jun 2007 Location: New Orleans, LA Posts: 52	Now bring on the camcorder app in iPhone with direct uploade to YouTube. Rich Koster DisneyEcho webMOUSEter

11-22-2007, 02:28 AM	#10
melgross Global Moderator Join Date: Sep 2004 Location: NYC Posts: 19,612	This settlement is really a "Get out of Jail Free card" for Apple.

11-22-2007, 09:01 AM	#11
digitalclips Registered User Join Date: Jun 2006 Location: South West Florida Posts: 1,584	Amazingly small amount given they were wining it seems, I am surprised it was accepted. However as an AAPL share holder I am thrilled.

11-23-2007, 05:21 AM	#23
sachxn Registered User Join Date: Nov 2007 Posts: 21	shares... Atleast now we can expect some rise in share prices of Apple. Sachin

11-23-2007, 05:51 PM	#25
addabox Registered User Join Date: May 2002 Location: 0aktown Posts: 9,226	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. party's over

11-24-2007, 04:06 PM	#27
MacGregor Registered User Join Date: Dec 2001 Location: Stumptown, with the nation's highest concentration of brewpubs, stripclubs, volcanoes and bookstores! Posts: 1,316	Burst's "win" of $10 million sounds like Dr. Evil in its lack of magnitude. The Mother of all flip-flops!! Support our troops by educating yourself and being a responsible voter. Democracy and Capitalism REQUIRE Intelligence and Wisdom if they are to be worth a damn beyond the next election or quarterly earnings report! And the lessons of the 20th century are that neither the state nor the free market hold a monopoly on Wisdom.

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