Microsoft and Proclarity Settle Patent Suit with Timeline

One day before a scheduled jury trial in its long-running patent dispute with Timeline, Inc, Microsoft and its Subsidiary, ProClarity Corporation entered into a binding settlement agreement. The following is from Timeline's form 8-K filed today with the SEC.

"Pursuant to the Settlement Agreement, the parties agreed to dismiss, with prejudice, their respective claims and counterclaims against each other asserted in the Actions. The parties further agreed to release and discharge each other from any claims existing as of the effective date with respect to the Actions or related to the facts and circumstances asserted in the Actions. In addition, Timeline agreed to release and discharge customers of Microsoft and ProClarity for liability for patent infringement, to the extent set forth in the Patent License Agreement. The Settlement Agreement is not an admission of liability by any party with respect to the Actions.
Under the Settlement Agreement, Microsoft agreed to pay Timeline a one-time payment of $5 million within 14 days as consideration for entering into the Settlement Agreement and the Patent License Agreement. The net proceeds to Timeline from this amount will be reduced by payment of its 45% contingent attorneys' fees and other expenses of the litigation."

As explained in Timeline's SEC filing, Microsoft was granted a worldwide license to Timeline's patents that were the subject of the Actions (including U.S. Patent Nos. 5,802,511, 6,023,694, 6,026,392, 6,625,617 and 6,631,382) "for use in connection with Microsoft's products and services."