By Richard Koman for SiliconValleyWatcher

Apple has agreed to pay Creative $100 million to settle a patent dispute that was blowing in Creative's direction (official statement here). The dispute was over the user interface for the iPod. The legal wrangling dates to May, when Creative sued Apple for violating its Zen Patent, according to AppleInsider.

On the same day, Creative also submitted a complaint to the U.S. International Trade Commission (ITC), seeking an exclusion order to prevent Apple from importing its iPods into the United States. Apple immediately counter-sued Creative, reversing the charges and stating that Creative's digital music players infringed on some of its own iPod patents. In the weeks that followed, Apple tacked on yet another suit, which similarly charged Singapore-based Creative with continuous infringement on three more of its iPod patents.

Things started looking bad for Apple when the ITC voted to investigate Apple's use of Creative's patent. The settlement gives Apple a license to use Creative's patent in all Apple products, and what's more Creative joins Apple's "Made for iPod" program and will announce their own iPod accessories.

"Creative is very fortunate to have been granted this early patent," said Steve Jobs, Apple's CEO. "This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation."

ThinkSecret says the move removes a big distraction for Cupertino that "could have hung over the company for more than a year while the lawsuits were sorted. It also represents a substantial savings over what it could have been ordered to pay had it lost in court."

Meanwhile, Apple has fired five retail employees and is threatening to can dozens more for downloading developer versions of Leopard, ThinkSecret reports. The software had been distributed to developers at WWDC two weeks ago.

"All of us know that we violated our NDA and ethics policy. Therefore, because we had the character to tell the truth and to face the consequences of our actions, we were terminated," said one of the fired employees, who spoke with Think Secret on condition of anonymity. "My only question is, if we all lied and denied it would we still be working at Apple today? Even more so, is that the kind of person that Apple wants working for them?"