Apple settles suits over iMac knockoffs

Apple Computer filed a suit against Daewoo and Emachines last year, as well as their respective distributors, complaining that the companies released computers that copied the look of the iMac. The curvy, colorful iMac has been an enormously popular consumer product in large part because of its innovative design.

Full terms of the out-of-court settlements were not disclosed. Emachines said the eOne may continue in another form.

"We did settle with Apple and agreed to stop manufacturing and selling the current eOne," said an Emachines spokesperson. "However, Apple agreed to a provision for us to sell a redesigned eOne."

An Apple spokesperson said: "The court sided with Apple with the preliminary injunctions, and then these companies agreed to the settlements. As far as we're concerned, this has ended it."

The settlement with Daewoo was achieved after a federal judge in San Jose, Calif., issued a preliminary injunction in November effectively barring sale of the computers until the suit was resolved. A Tokyo court issued a similar injunction against K.K. Sotec, a distributor for Emachines.

Since the suits were filed last year, the iMac has been credited with helping to spur more innovative designs in the PC world, with industry heavyweights promoting a move away from the traditional beige PC boxes. As a result, traditionally staid companies such as Dell Computer and Compaq Computer have released their own Internet-centric PC designs.

Attempting to ride the enormous consumer and industry response to the iMac, Emachines and Daewoo launched iMac look-alikes last August. The Emachines and Daewoo systems copied iMac's design but ran Microsoft's Windows operating system. Apple filed its suit in September, arguing the all-in-one systems from its competitors were too similar to the iMac in design and would cause confusion among Apple customers.

Apple's litigation against the companies alleged violations of trade dress, which refers to the distinctive style or look of a product. Historically, the courts have not extended trademark protection to a product's design, but more recently, some have begun to grant trademark protection to "stylized" items on the grounds that novel industrial design can communicate a distinctive idea or image. Like the iMac, the Emachines all-in-one featured a translucent design with blue accents.

The suits came at a particularly inopportune time for Emachines, which filed to go public in late August. The low-cost PC maker listed the lawsuit as a potential risk for investors because of the long-term implications on sales as well as the expense associated with a lengthy court battle. Emachines has since aquired FreePC but says it is still on track for its IPO.

The eOne is still being promoted on the Emachines site, and it is unclear if the system is still being offered in retail stores where Emachines products are sold.