Apple and Creative Technology have agreed to settle a patent dispute over the iPod user interface.

Creative filed a lawsuit against Apple in May alleging that the firm infringed on a patent that Creative had applied for in 2001 and was awarded in August 2005.

The company demanded that Apple cease all production and sales of its iPod portable media players.

Apple responded with a counterclaim, alleging that Creative had infringed on four of its iPod patents.

The settlement ends all legal actions and will grant Apple a licence to use Creative's patents in all its products.

Under terms of the agreement, Creative has also joined Apple's 'Made for iPod' programme, allowing the company to manufacturer iPod accessories.

"Creative is very fortunate to have been granted this early patent," Apple chief executive Steve Jobs said in a statement.

"This settlement resolves all our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation."

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