Apple said today it has agreed to pay rival Creative Technology $100 million (£53 million) to settle all outstanding patent litigation between the two companies.

The agreement, which settles five pending lawsuits, allows Apple to use Creative’s technology in its iPod, the world’s best selling digital music player.

Steve Jobs, Apple chief executive, said "This settlement resolves all of our differences with Creative and removes the uncertainty and distraction of prolonged litigation."

"A $100m settlement is nothing compared to the $2 billion in revenues Apple made from iPod-related sales in the last quarter alone," Struan Robertson, an intellectual property lawyer at Pinsent Masons, said.

"With iPod units, songs and accessories generating almost half of Apple’s total revenues, it’s very possible they are paying to make this problem go away."

Apple said it would be able to recoup some of the $100 million fee if Creative is able to licence its technology to other manufacturers but the statement did not provide further details. Apple did not return calls seeking clarification.

The patent dispute centred on technology that controls the way users select songs on their music player.

Creative sued Apple in May claiming it was infringing on its patent. A week later Apple countersued, again for patent infringement. Similar lawsuits were launched in different US states and Creative also asked the International Trade Commission to investigate Apple for patent infringement.

Stephen Reese, an intellectual property lawyer at Olswang, said: "Even if Creative thought they had a very strong case there is always an argument for settling litigation because it provides legal certainty for the parties as you can never be sure of winning a dispute that goes to court.

"What we don't know are the full terms of the settlement and while on their face they may seem one-sided you can often engineer settlements to provide a win-win situation for both parties."

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