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Apple Agrees to Settlement Over Burst's Claims

Burst.com has notched another win related to its patented multimedia delivery technology, this time reaching a settlement with Apple.

Santa Rosa, Calif.-based Burst said the PC and iPod maker has agreed to pay it a one-time sum of $10 million in exchange for a non-exclusive license to key parts of Burst's patent portfolio, which relates to video and audio delivery software for IP networks.

Burst.com also said it has agreed not to sue Apple over any future infringement of Digital Video Recorder technology developed by Burst. The company has one patent in the area, and three pending.

The settlement comes after almost two years of litigation between the two companies.

Burst.com CEO Richard Lang told InternetNews.com last April that the success of Apple's popular iTunes, iPod and QuickTime products depend on the customer's ability to download a movie or a song in less time than it would take to play that video or song.

Lang claimed the technology behind that ability is a Burst.com invention.

"I devised an apparatus and technology to take audio and video and deliver it at a different rate than it was being consumed," he said at the time.

The actual payment in the Apple suit could end up being only $4.6 million after court costs, attorney fees and other expenses are deducted. In a statement, Burst said its Board of Directors is considering a cash distribution to its shareholders from the settlement.

Neither Apple nor Burst responded to requests for comment by press time.

The settlement marks the latest success for Burst.com against a far larger defendant. The company reached a settlement with Microsoft in March 2005 for $60 million, granting the software giant a non-exclusive license.

Burst earlier had been an official Microsoft partner with expectations that its technology would be incorporated in Windows Media Player. But Burst alleged in 2002 that Microsoft used its technology without paying for it, resulting in a prolonged court battle.

The agreement with Burst also comes as Apple's latest settlement in connection with its music business. In August 2006, Apple settled a patent infringement suit filed by Creative Technology related to the Cupertino, Calif.-based company's iPod.

The suit stemmed from a patent Creative held for its rival Zen MP3 player that covered how users navigate menus in digital music devices. In the ensuing settlement, Apple agreed to pay $100 million and to make Creative an official iPod accessory supplier.