Friday, April 09, 2004

Millions more for Sun from Microsoft patent pact? | CNET

Millions more for Sun from Microsoft patent pact? | CNET "The 10-year payment schedule is part of a covenant the two companies signed that permits them to sue each other for patent infringement but discourages this by prohibiting the collection of financial damages from such a suit, said Lee Patch, Sun's vice president of legal affairs.
Microsoft agreed to pay Sun $900 million for the covenant governing patents up to the date of the Friday agreement, Patch said. According to the filing, Microsoft has the option to extend the covenant each year afterward for a further payment. If Microsoft extends the covenant for all 10 years, the payments total $450 million, Patch said.
In addition, the filing said, if Microsoft makes the payments for all 10 years, the companies will automatically strike a patent cross-licensing agreement--a perpetual license to use all of each other's patents. But the covenant would be superseded if the companies sign a patent cross-license agreement before that--and they've said they intend to begin negotiations for such an agreement."
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