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Wednesday, November 21, 2007, 07:55 pm PT (10:55 pm ET)

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.