The agreement between the two companies will be finalised this
week, according to reports.
The case dates back to 1999 when negotiations began between
Burst and Microsoft over a possible licence for Burst's technology
that would allow high quality video-on-demand over the internet.
After two years, negotiations broke down.
Burst sued in June 2002, alleging that Microsoft's
newly-announced 'Corona' product used technologies and trade
secrets misappropriated from Burst following the unsuccessful
negotiations. The suit alleged patent infringement, breach of the
California Trade Secrets Act, and breach of contract.
The Santa Rosa, California-based company also alleged antitrust
practices, arguing that Microsoft used its dominant market position
to encourage companies not to use Burst's software.
The license agreed in the settlement deal is for use only by
Microsoft in its own product and does not include sub-licensing
rights.
Burst's CEO, Richard Lang, said: "We spent over a decade
developing and patenting the technology in anticipation of the
markets that are now emerging. Microsoft taking a licence validates
the innovation of the Burst technology embodied in the underlying
patent portfolio."
Tom Burt, deputy general counsel for Microsoft, said: "While we
were confident of prevailing in this lawsuit, we have been open
from the beginning to finding a reasonable way to resolve this
case."
