Transcript of Speech by Craig McHugh, President of Creative Labs, at the press conference call on the ZEN Patent held on 30 August 2005
Thank you for joining us today, I know many of you are very familiar with Creative. But for those of you who may not know us as well, we are the worldwide leader in PC audio technology, the creator of Sound Blaster, and one of the global leaders in the MP3 player market. We have been an innovator in MP3 players from the release of our first NOMAD flash-based MP3 player in April, 1999 and our first NOMAD Jukebox in September, 2000 to our most recent announcement of our ZEN Vision music, photo and video player that we announced this month. Over the last three quarters, we have sold more than six million of our MP3 players. In our most recent quarter, sales of our MP3 players including our ZEN Micro were up 260 percent year-over-year.
We have a research and development team of over 1200 engineers worldwide, heavily focused on innovation, design, quality and developing products providing an exceptional user experience. We have a broad array of technologies and key patents in the audio, portable media player and graphics areas.
As we announced in today's press release, we were awarded U.S. Patent number 6,928,433 on August 9th, 2005, which we are referring to as the "ZEN Patent." We originally applied for the ZEN Patent on January 5th, 2001. The ZEN Patent was awarded to Creative for our invention of the user interface for portable media players, including many of the Creative ZEN and NOMAD Jukebox MP3 players and found in some competing players such as the Apple iPod and iPod mini.
The user interface covered by the ZEN Patent was invented by research and development engineers at our Advanced Technology Center in Scotts Valley, California. After a major investment of time and effort by a group of our research and development engineers, they developed a user interface that enables users of portable media players to efficiently and intuitively navigate and select tracks on a portable media player.
To help illustrate the invention that is covered by the ZEN Patent, I would like to now refer you to slides we have posted on our website at creative.com/zenpatent. As some of you may not be able to access the slides right now, I will try to describe the slide contents as we move through the example.
While I give you a brief moment to call up the slides from our website, I would note that I am going to walk through one example of the patented hierarchical navigation on portable media players, of the ZEN Patent.
The ZEN Patent covers this type of hierarchical navigation on portable media players.
This example we just covered of going from menu to artists, to albums, to a list of tracks, is just one way to experience our patented user interface. The user could, for example, alternatively start by selecting Genres from a display screen to show a listing of various genres, which could lead to a listing of artists, which could lead to a listing of albums and then to a listing of tracks.
The example we just walked through with the slides, highlights how intuitive and efficient our invention for a user interface makes it to get to a track and select from a significant number of tracks that can be stored in a high capacity portable media player.
There has been press coverage recently regarding the rejection of Apple's patent application, published as Pub. No. U.S. 2004/0055446 for a user interface in a multimedia player. This Apple patent application was filed on October 20, 2002. A related provisional application was filed by Apple on July 30, 2002, seventeen months after our filing date for the ZEN Patent and twenty months after our NOMAD Jukebox based upon our user interface was on the market.
We shipped the NOMAD Jukebox to U.S. retail customers in September of 2000, and by November of 2000, it was already ranked as the top revenue-generating product in the U.S. in the digital audio player category, according to PC Data. By January of 2001, we announced that we had already sold 100,000 NOMAD Jukeboxes. The Apple iPod was only announced in October 2001, a full 13 months after we had been shipping the NOMAD Jukebox based upon the user interface covered by our ZEN Patent.
Since the year 2000 we have designed nine generations of portable media players using the ZEN Patent.
We continue to innovate in portable media players with the introduction of the ZEN MicroPhoto and the ZEN Vision, which adds high-quality video playback to its MP3 music and digital photo viewing features. Both the ZEN MicroPhoto with a color OLED screen and the ZEN Vision, are based upon the user interface covered by the ZEN Patent.
The full text and images of the ZEN patent are available at www.uspto.gov by doing a patent number search under issued patents.