Apple's iPod may face new patent challenge

updated 11:14 p.m. ET Aug. 30, 2005

SAN FRANCISCO - Raising another legal threat to the iPod music player, Creative Technology Ltd. said it has been awarded a U.S. patent for a song-navigation technology it claims is used on Apple Computer Inc.'s market-leading devices.

The Singapore-based digital audio company did not, however, say how it would attempt to enforce the patent. And some experts were skeptical that legal action could succeed at extracting cash from the maker of the world's most popular music players.

"Apple tried to claim invention, but this patent dispels that," said Craig McHugh, president of Creative Labs, a Milpitas-based subsidiary. "We are going to look at all the alternatives that the patent provides. We can look at legal remedies."

McHugh said the U.S. Patent and Trademark Office granted the patent Aug. 9 for a user interface it developed long before the first iPods went on sale in October 2001. The technology is used, by Creative, in the Creative Zen and Nomad Jukebox MP3 players.

"We plan to be very vigorous in the defense of our intellectual property," said McHugh.

Apple spokesman Steve Dowling declined to comment.

Creative's claims come less than a month after an iPod-related patent application made by Apple was rejected because archrival Microsoft Corp. had filed a similar application five months earlier. Some speculated Microsoft could demand a share of iPod sales.

Patent attorneys were skeptical, however, noting that patent rejections are common and that Apple can press its case in numerous other ways. Cupertino, Calif.-based Apple could appeal the rejection, or tweak its patent claim so it wouldn't overlap with Microsoft's or ask the patent office to determine which company came up with the technology first, the attorneys said.

It's too early in the process to determine who might prevail in the Microsoft case and the same is true with Creative's claims, said Randy Gard, an attorney with Carr & Ferrell LLP, a law firm that specializes in technology patents.

Claiming patent infringement "might be good in the press but it may not have relevance in the court," Gard said.

Gard wonders whether the controversies are a case of two competitors ganging up on Apple.

In July, Microsoft Chairman Bill Gates said the software giant would work with Creative and its other partners to produce better-designed MP3 players to counter the success of Apple's iPod.

Creative says it began shipping music players to the United States featuring the navigational technology in September 2000. That was more than a year before the October 2001 launch of iPod, according to McHugh.

Creative has struggled to match the success of the iPod, which was critically praised for its intuitive navigation.

Apple now owns 54 percent of the global MP3 player market while Creative has about 10 percent, industry analysts say.

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