On Wednesday, Apple agreed to settle a two-year patent dispute with outfit Burst.com.

The suit, which alleged that Apple had infringed four patents for compression of compressed audio and video files in iTunes, iLife, QuickTime and the iPod, was settled out of court with Apple agreeing to pay Burst.com US$10 million.

In exchange for the US$10 million, Apple will receive access to Burst.com's patent portfolio, with some exceptions. According to Macworld News, the company won't have access to four of Burst.com's current and pending patents, including three pending patents relating to digital video recorder technologies. In addition, Burst.com has stated that it has agreed not to sue Apple over current or pending DVR patents.

The settlement itself will reduce Burst.com's proceeds down to roughly US$4.6 million after court costs, expenses and attorney's fees.

The history of the conflict began back in 2004 when Burst.com asked Apple to license some of its patents, which they stated were at the heart of the iPod. Legal action began in January of 2006 when Apple sued Burst.com in the U.S. District Court for the Northern District of California in pursuit of a judgement stating that the Burst.com patents were invalid and hadn't been infringed. Burst.com launched a counter-suit in April of 2006, citing that Apple had infringed upon four of its patents.

Burst.com had also settled a similar case with Microsoft for US$60 million in 2006.

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