Apple Files Countersuit Against Creative
Lawyers Rejoice As Creative and Apple Feed The Litigation Economy
Apple Computer filed a countersuit against Creative claiming that the Singapore based concern infringed on four of their iPod user-interface patents. The suit was filed in response to a similar allegation against Apple by Creative that was made this week. Creative is seeking damages and the suspension of iPod sales in the US. With Creative’s founder and CEO, Sim Wong Hoo, coming up way short on a challenge to Apple’s iPod dominance last year, this may be a way to save face.
Creative reported a record quarterly loss of $114 million, which Sim Wong Hoo charged on falling prices in the digital player market and dead inventory. Apple’s decision to file a counter-suit against Creative did not surprise analysts since it feels it innovated the digital music player market, has several portable player and interface patents, and the iPod is, to put it lightly, its bread & butter. Creative has been a standout in its sector since the debut of its popular Sound Blaster sound card in the 1990s. However, Creative’s financial performance has deteriorated as the competitive me too MP3 player market has led to price cuts. Without innovating the market, Creative saw sales of its MP3 players fall 51 per cent from the previous quarter. So what do they do? Sue!!
However, Creative’s shareholders didn’t agree with the move which saw the company’s stock drop 2.6 per cent to S$9.20.
The Future: Go to law school.