Eastman Kodak Co. accepted a $92-million payout by Sun Microsystems Inc. to settle a $1-billion patent infringement lawsuit over the Silicon Valley company's Java programming language.
A federal jury in Kodak's hometown of Rochester, N.Y., decided last week after a three-week trial that Java infringed patents Kodak acquired when it bought Wang Laboratories Inc.'s imaging software business in 1997.
The trial's damages phase was to begin Thursday, but the companies ended their 2-year-old battle in an out-of-court settlement Wednesday night.
Without admitting or denying the allegations, Santa Clara, Calif.-based Sun said it would pay Kodak $92 million to settle all claims in the dispute. In exchange, Sun said it received a license for Java under all Kodak patents.
"The settlement assures customers worldwide that Sun will stand behind its products and intellectual property and eliminates any uncertainty that could result from a protracted lawsuit and appeal," the company said.
Kodak declined to comment on the terms of the settlement.
Kodak had been prepared to request $1.06 billion in lump-sum royalties -- equal to half of Sun Microsystems' operating profit from sales of computer servers and storage equipment running Java from 1998 to June 2001.
Sun Microsystems made its name selling servers that link desktop computers and play host to websites. Java, which it developed and introduced in 1995, allows software to run on a variety of computing platforms, regardless of the operating system, including cellphones and other portable devices.
Sun Microsystems not only denied that any portions of Java infringed Kodak's patents but also argued that the photography company's patents were invalid.
Kodak's patents describe a method by which a program can "ask for help" from another application to carry out certain computer functions -- which is similar, it contended, to the way Java operates.
Shares of Kodak rose 1 cent to $34.26 on the New York Stock Exchange. Sun shares fell 8 cents to $4.23 on Nasdaq.