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Breaking News: $92 Million Settlement in Kodak-Sun Java Patents Case
For the $92 million Sun receives a license from Kodak and can declare 'business as usual' in Javaland
By: Java News Desk
Oct. 7, 2004 12:00 AM
The trial in the U.S. District Court for the Western District of New York in Rochester involving Eastman Kodak Co and Sun Microsystems will no longer be entering its penalty phase, as it was otherwise expected it would today. The parties agreed instead this morning to an out-of-court settlement, under which Sun has agreed to pay Kodak $92 million for a license with respect to the three US patents Java has been found to breach..
Accordingly, Judge Michael Telesca has signed an order formally dismissing the case - "with prejudice."
It was just last Friday that a federal jury ruled in favor of Kodak in its dispute over Java, in which it alleged that the middleware mechanisms provided by Sun Microsystems' world-beating language in fact infringe patents Kodak acquired from Wang Laboratories Inc. in 1997.
At the time of the jury verdict, a spokesman for Kodak said: "Kodak has and continues to make substantial technology investments to ensure high-quality products. We are pleased that the court has validated Kodak's intellectual property rights protecting these valuable innovations."
Now, despite having argued throughout the 3-week trial that Java did not infringe on the Kodak patents and that, even if it did, the patents were invalid, Sun has evidently decided that a speedy settlement is imore aligned with its - and Java's - interests than further days in court. For the $92 million Sun receives a license and can declare 'business as usual' in Javaland.
In pre-trial documents Eastman Kodak Co lawyers had indicated that in the penalty phase the company would be asking for $1.06 billion in lump-sum royalties - a figure that represents half of Sun's operating profit from the sales of computer servers and storage equipment between January 1998 and June 2001. So $92 million is quite a bargain, many will doubtless argue.
By dismissing the case "with prejudice," Judge Telesca is indicating that the door is closed to Eastman Kodak Co. filing suit elsewhere in this matter. To do so would risk its infringement claim being dismissed completely. In the court docket Telesca also stated that the US District Court would be making sure that the terms of the agreement were properly implemented.
The cash settlement brings to an end a high-profile situation which has caused an outcry about the possible inadvisability of computer software being subject to US patent law, on the basis that perhaps copyright and trademarks are enough.
Graphic: Richard Silverberg (firstname.lastname@example.org) SYS-CON Media
Sun's president and COO, Jonathan I. Schwartz, who is on record recently as saying that he believes passionately in patents, told the Associated Press this afternoon: "We are eager to put this punitive litigation behind us."
Sun appears ultimately to share Schwartz's passion, then, and has today shown itself to be willing to invest $92 million of its substantial cash war chest in proving it.
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