MANHASSET, N.Y. Sun Microsystems has reached an out-of-court settlement with Eastman Kodak Co. in a two-year patent dispute over its Java programming language, agreeing to pay the imaging products company $92 million in return for license rights to the popular software.
Both companies reached the settlement Wednesday evening, on the eve of when the U.S. District Court for the Western District of New York was scheduled to begin the damages phase of the trial.
The stage for the settlement was likely set last Friday, when after a three-week trial the court ruled in favor of Kodak, stating that Java infringes on patents Kodak acquired when it bought Wang Laboratories Inc.'s imaging software business for $260 million in 1997.
In reaching the settlement, Sun refused to admit or deny allegations it had infringed Kodak's patents, which describe a method by which a program can ask for help from another application to carry out certain computer functions. Kodak argued Java operated in a similar fashion.
"Sun's Java Communities represent the future of the Internet. The Communities' vitality, along with the safety of every other open community in which Sun participates, from OpenOffice.org to the upcoming open Solaris OS community, are of paramount concern to us," said Jonathan Schwartz, president and chief operating officer, in a statement.
"We are eager to put this punitive litigation behind us, to have reached a decision in the best interest of our stockholders, customers and employees, and to focus our future activities on the evolution of the Internet and Sun's place within it," Schwartz added.
Sun Microsystems developed Java in 1995 to allow software to run on various computing platforms, regardless of the operating system. The company had argued that Kodak's allegations of patent infringement were invalid and was reportedly prepared to mount a vigorous defense.
But with the court ruling in favor of Kodak, Sun faced the prospect of having to possibly pay the company as much as $1.06 billion in lump-sum royalties -- equal to half of Sun Microsystems' operating profit from sales of computer servers and storage equipment from January 1998 to June 2001.
Neither Kodak nor Sun would further comment on the settlement.