Settlement Reached Between Business Objects, Cognos
Admitting no wrong, Cognos agrees to pay $24 million to settle a patent-infringement suit brought by Business Objects.
Cognos Inc. is paying $24 million to Business Objects SA to settle a patent-infringement lawsuit. Cognos will take a $23.2 million charge against its earnings for fiscal 2002, which ended Feb. 28.
In the two-year-old suit, Business Objects claimed that Cognos' Impromptu query-and-reporting software violated a patent that Business Objects holds on a method for accessing information in relational databases. The technology uses a semantic layer to insulate users from complex database structures. Two years ago, Business Objects settled a similar lawsuit it brought against Brio Software Inc. (then Brio Technology) for $10 million.
Cognos denied Business Objects' claims and, despite the settlement, maintains that it did not violate any patent. The settlement, according to a company statement, "reaffirms that Cognos makes no admission regarding the validity, enforceability, or infringement of any patent." Cognos says it chose to settle because the ongoing litigation was becoming a distraction and the company wanted to eliminate the risks associated with a jury trial.
"We truly believed in our right to continue to use technology that we had developed prior to Business Object's filing for and being granted a patent," Cognos CEO Ron Zambonini said during a conference call Tuesday.
Business Objects, however, portrays the settlement as a successful enforcement of its patent. The company says that with the $24 million, "Cognos will license the rights to the patent" and will place the notice "U.S. Patent No. 5,555,403" on each copy of Impromptu. The two companies also agreed to a five-year moratorium on any additional patent litigation.
Cognos will pay $10 million to Business Objects by June 10, then make quarterly payments of $1.75 million over the next two years. The $23.2 million special charge, the present value of the settlement, will reduce Cognos' reported pre-tax earnings for fiscal 2002 from $51.4 million to $28.2 million.
5 Top Federal Initiatives For 2015As InformationWeek Government readers were busy firming up their fiscal year 2015 budgets, we asked them to rate more than 30 IT initiatives in terms of importance and current leadership focus. No surprise, among more than 30 options, security is No. 1. After that, things get less predictable.