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Sun, Microsoft Settle Lawsuit

Sun, Microsoft Settle Lawsuit; Settlement Protects Java Platform Microsoft To Pay Sun US$20 Million As Part Of Agreement

January 25 - Sun has announced that Microsoft Corporation has agreed to settle Sun's lawsuit regarding the Java technology. The settlement reached Jan. 23 will protect the future integrity of the Java platform. In addition, as part of the agreement, Microsoft has agreed to pay Sun US$20 million, to accept Sun's termination of the prior license agreement, and to a permanent injunction against unauthorised use of Sun's JAVA COMPATIBLE trademark.

To protect those developers using Microsoft's outdated implementation of Sun's technology, Sun has licensed Microsoft to distribute its existing versions, provided that all future versions of such products conform to and pass Sun's compatibility tests.

"It's pretty simple: This is a victory for our licensees and consumers," said Sun Microsystems' CEO Scott McNealy. "The community wants one Java technology: one brand, one process and one great platform. We've accomplished that, and this agreement further protects the authenticity and value of Sun's Java technology."

Introduced just six years ago, the Java technology is now licensed by 200 companies and used by 2.5 million developers. It is the fastest growing application platform in history, and now runs on everything from the smallest cell phones to the largest enterprise servers. Sun's Java technology has been called a defacto platform for e-business solutions.

"All along, this case has been about protecting licensees, developers and consumers by preserving the integrity and consistency of the platform," said Pat Sueltz, executive vice president, Sun Microsystems' Software Systems Group. "The Java technology has become ubiquitous because of the tremendous promise it delivers in the networked computing world. This settlement will ensure that this promise will continue to be fulfilled."

The technology has achieved enormous success because it allows developers to build applications, from seemingly simple banner advertising in internet browsers to complicated e-commerce tools and applications for the wireless connected consumer, that will run on the broadest range of machines possible. This reduces "switching costs," or the expense of having to modify applications depending on what platform they are to run on.

Microsoft realised it needed to offer the Java technology to its developers and customers. But the technology also threatened Microsoft's monopoly hold on the desktop operating system market because the technology can be used to develop applications and products that are not dependent on the Windows operating system.

Microsoft's response to this issue was to license the technology from Sun in 1996, promising to deliver only compatible implementations of the technology. But Microsoft broke its promise, and began distributing incompatible implementations so that applications written to those implementations would run only on Windows.

Sun repeatedly asked Microsoft to stop shipping incompatible implementations of the Java technology. Microsoft refused. As a result, Sun terminated the Technology Licensing and Distribution Agreement.

"The premise and the promise of the web is a notion that you can trust all the participants to honor their commitment to abide by the same set of rules," Sueltz said. "Those rules require each member of the community to ensure that its technology will conform to the standards that enable its products to interoperate with other technologies.

"Microsoft has proven time and again that it is unwilling to abide by the common rules of the internet," Sueltz said. "Its behavior with regard to the Java technology was just one instance. And when presented with the choice of compatibility or termination, Microsoft chose termination."

With the contract terminated, Sun and Microsoft have agreed to end the current litigation, initiated in October, 1997 before Judge Ronald M. Whyte in U.S. District Court in San Jose, under the following general terms:

1) The Court will enter a permanent injunction barring Microsoft from using the JAVA COMPATIBLE trademark. Previously, the Court found that Microsoft had distributed incompatible implementations of the Java technology, and the court entered a preliminary injunction barring Microsoft from using the JAVA COMPATIBLE trademark on these incompatible products.

2) To protect developers and consumers who have already invested in Microsofts implementations of the Java technology, Sun has agreed to grant Microsoft a limited license to continue shipping essentially as is its currently shipping implementations of the outdated 1.1.4 version of the Java technology. Those products have already been modified to comply with injunctions secured by Sun in the litigation. The license covers only the products that already contain the Java technology, and lasts only for seven years.

Beyond that, Microsoft has no rights to distribute the Java technology, or to otherwise use any of Sun's intellectual property.

Sun's Java technology continues to grow as the unifying element for all network services.

"This year in the wireless and interactive television markets, our partners will deliver millions of devices, all powered by the Java technology," said Rich Green, vice president and general manager of Java Software, Sun Microsystems. "Our partners will deliver more than 250 million Java technology-powered smartcards this year, setting a uniform standard for security and personalisation services on the web.

"And, more than 90 percent of the application server industry has adopted J2EE as the defacto standard," Green continued. "The Java technology now powers every type of device on the web, and does so with an architecture that is open to both innovation and partnership."

"By taking the direction it has, Microsoft is choosing to challenge rather than partner with the participants in the web services community," Green said.

Sun will continue to make freely available the latest, most highly optimised version of the Java technology (JDK 1.3) for Windows, and intends to continue exploring the possibility of having Microsoft distribute compliant versions of the latest, most robust Java technology.

"Perhaps in time Microsoft will realise the benefits of joining the Java community," Sueltz said.

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