Apple has agreed to a $22 million settlement in a class-action lawsuit regarding scratches on the first-generation iPod nano. The case, which dates back to October 2005, alleged that first-gen nano screens “scratch excessively during normal usage, rendering the screen on the nanos unreadable, and violating state consumer protection statutes… and causing Plaintiff class members to incur loss of use and monetary damages.” Apple denied the claims, suggesting that users were subjecting the nanos to unusual forms of abrasion, but quietly made two changes, only one of which was known to the public. In addition to adding cheap sleeve-like cases to the nanos, the settlement reveals that Apple began selling “coated” iPod nano units in December 2005; some, but not all, units sold during this time received the coating. As a consequence, units with some iPod nanos were more susceptible to scratching than others, and the settlement provides differing remedies for different users.

According to the terms of the settlement, customers who did not receive slip cases with their nanos may be entitled to a cash payment of $25, while users who did receive the cases may be entitled to a $15 payment. Those with the scratch protection appear to be entitled to nothing. Of the three different first-generation units we tested in the settlement web site’s serial number verifier, one 4GB model was deemed eligible, while two 1GB units were not. The $22.5 million also includes attorneys’ fees of $4.5 million and litigation expenses of up to $200,000. A judge still needs to sign off on the terms of the settlement; a hearing on the matter has been scheduled for April 28.