Seattle, WA — Scott Hillis reported: Software giant Microsoft Corp. and Sun Microsystems Inc. on Tuesday settled a bitter, 3-year-old lawsuit, with Microsoft agreeing to pay its rival $20 million for limited use of its Java programming technology. The suit, filed by Sun in October 1997, alleged Microsoft had violated terms of its licensing agreement for Java by improperly modifying the technology so it would only work with its Windows computer operating system.
Sun, which makes powerful server computers and software that dish up Web pages, is a perennial foe of Microsoft that has helped the U.S. government in its antitrust case against the software titan. Microsoft is appealing a federal judge’s ruling last year to split the company in two.
The settlement of the suit, which had not gone to trial, lets Microsoft use Java in existing products such as its Internet Explorer browser, and those now in a testing phase, for the next seven years. Java is a “write-once, run anywhere” computer language that lets programs run on a variety of operating systems and devices. Microsoft critics charged that the company altered Java to try to maintain the dominance of Windows.
A previous five-year license and distribution agreement for Java struck in March 1996 was terminated, two months early. A Microsoft countersuit was also dropped. But future Microsoft products cannot use Java, which is liberally sprinkled throughout the Internet on Web sites and intergrated into much Web-based software. It was not immediately known how the settlement will affect Microsoft’s .NET strategy, a sweeping plan for the next several years that aims to turn Microsoft’s software into a service that can deliver data to users anywhere.
Last year, Microsoft launched a rival computer language to Java called C#, pronounced C-sharp, that analysts expect will take the place of Java in future Microsoft products.
Shares in Microsoft rose more than $1 to $61-7/8 in after-hours trading, following a rise of 7/16 on the Nasdaq. Sun shares rose almost $1 to $32-7/16, up from $31-9/16 in regular trading.
BOTH CLAIM VICTORY
Although the settlement laid to rest an annoying legal issue for two industry giants, it did little to temper the open scorn both companies have shown each other.
“Sun has used the legal system to compete against Microsoft for the last several years,” said Microsoft spokesman Jim Cullinan. “Both sides have had rulings lately for and against them. This was going to be costly litigation and both parties looked and said what can we do to bring this to an end.”
“We’re very pleased with this. It protects our customers and current products, since they are not impacted by the settlement,” Cullinan said. “As you know, in this industry, seven years is a very long time.”
Sun also claimed triumph out of the settlement, saying it preserved the integrity of its product. “It’s pretty simple: This is a victory for our licensees and consumers,” Sun Chief Executive Scott McNealy said in a statement. McNealy has often publicly — and colorfully — called for the break-up of Microsoft, scorned its products as inferior and labeled the company a bully.
“Microsoft is unwilling to accept the rules of the Web. Its behavior with regard to Java, and when presented with the choice of compatibility or termination, it chose termination,” Patricia Sueltz, vice president of Sun’s software systems group, told a conference call.
“I don’t think we gave away anything. We brought the suit, they’re writing a check for $20 million, we’ve terminated the agreement, they get to continue to distribute an outdated version of our technology, but they can’t use it for .NET, so think about it and you decide,” Sueltz said.