"We are pleased to inform you that Eolas Technologies Inc. and Microsoft Corporation have settled all claims between them," the letter states. The letter, written by Eolas COO Mark Swords, is dated Aug. 27.
The letter says shareholders of the closely held company will receive a per-share dividend of between $60 and $72 as a result of the deal. It also notes that the terms of the settlement are confidential. "We hope that you will understand we simply cannot now or in the future provide any confidential details regarding the terms of the settlement," Swords' letter states.
Eolas first sued Microsoft in 1999 in federal court in Illinois, claiming that the software maker's methods for accessing interactive content in Web pages viewed through Internet Explorer violated Eolas patents. Eolas was awarded $520.6 million in damages in 2003. Soon afterwards, Microsoft announced architectural changes to Explorer in an effort to work around the patents.
However, the initial judgment was tossed out on appeal in 2005.
The case was headed for a new trial in July when Microsoft and Eolas asked the court for a 30 day time out with an eye to working out a settlement, court records show.
Eolas will hold a shareholders meeting on Sept. 4 to discuss the impact of the settlement, according to Swords' letter.
A Microsoft spokesman commented via e-mail: "We're pleased to be able to reach an amicable resolution in this long-running dispute with Eolas and the University of California. Microsoft values intellectual property and believes that the proper protection and licensing of IP enables companies and individuals to obtain a return on investment, sustain business and encourages future innovations and investment in the IT industry."