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Thursday, December 25, 2003 - Page updated at 12:00 AM

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Microsoft agrees to pay SPX $60 million to settle patent-infringement suit

Seattle Times technology reporter

Microsoft confirmed yesterday it will pay $60 million to settle a lawsuit in which a unit of SPX accused the software giant of infringing a patent for real-time conferencing.

Nearly six weeks ago, a federal jury hearing the case in Richmond, Va., told Microsoft to pay $62.3 million in damages to Imagexpo, a subsidiary of the Charlotte, N.C.-based manufacturing conglomerate. But the case didn't end there.

A judge was still expected to rule on additional issues as well as to make a final ruling, and there always was a chance of an appeal.

Rather than pursue the case further, both sides decided to settle. Microsoft will pay SPX $60 million by Tuesday under the terms of the deal, although that amount will be reduced somewhat by legal and other expenses associated with the lawsuit, according to SPX.

SPX did not return requests for comment yesterday.

Microsoft spokeswoman Stacy Drake said yesterday the company still believes no infringement occurred but is pleased to have cleared up the legal issue.

"This settlement is another step in Microsoft's efforts to resolve legal conflicts so we can focus on the future," Drake said.

Imagexpo filed a lawsuit in October 2002, alleging Microsoft infringed a patent related to real-time conferencing in a product feature called NetMeeting Whiteboard. The feature allows conference participants to draw diagrams for each other as well as to exchange and mark up graphics.

Imagexpo is a little-known subsidiary of SPX, a company with 24,000 employees and $5 billion in annual sales. SPX makes security systems, broadcast antenna systems and industrial products such as hydraulic pumps.

Investors seemed unfazed by news of the settlement. SPX's share price closed yesterday at $58.08, down 72 cents. Microsoft closed down 11 cents at $27.04.

Microsoft has agreed to settle a number of lawsuits this year. Most notably, it committed in May to pay $750 million to settle an antitrust suit brought by AOL Time Warner. The company also said in September it would pay $23.25 million to defunct software company Be Inc. to settle another private antitrust case.

And Microsoft agreed in January to pay $1.1 billion to settle class-action lawsuits brought by Californians who alleged the company unfairly used its monopoly to overcharge for products.

Microsoft has a $51.6 billion cash hoard, at last disclosed count. Executives have said repeatedly the company maintains such a large reserve in case it needs money to resolve pending lawsuits, including ongoing antitrust cases, and to fend off challenges such as freely shared "open source" software.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com

Copyright © 2003 The Seattle Times Company

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