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TechWeek: How Apple Got a Sweet Deal

At least from a public relations perspective, this week wasn't a great one for Apple Computer (AAPL).

The company recalled 1.8 million batteries used in its notebook computers. Rival SanDisk (SNDK), the No. 2 maker of digital music players in the U.S., got a lot of buzz for a new product that, at least on paper, looks superior to Apple's iPod nano, its bestselling model.

And the company agreed to pay Creative Technologies (CREAF) $100 million to settle a patent dispute, essentially -- if not technically -- admitting that it had illegitimately borrowed some of Creative's ideas in designing the iPod's interface.

But PR -- not to mention $100 million -- isn't everything.

When compared with the way other notable patent disputes have gone of late, Apple's settlement with Creative starts to look like one of the best ways to handle a bad situation: Faced with a serious threat to a core product, you get your lawyers on the phone with the other guy's lawyers, you throw some money at the problem, and you settle it -- and make it go away.

And you get bonus points if, like Apple, you can turn your potential courtroom opponent into a business partner and give yourself a chance to recoup some of your settlement costs.

"This is a smart move for Apple," says Scott Marrs, a patent attorney for Houston, Texas-based Beirne, Maynard & Parsons. "Someone really took a hard look at this -- and appropriately so -- and said, 'Let's focus on our future business.' "

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