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Microsoft, Salesforce Settle Patent Feud

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Posted August 4, 2010 By Stuart J. Johnston     Feedback

A detente is reached between a colossus in deployed software and a growing power in CRM software-as-a-service.

Microsoft and Salesforce.com have settled their competing patent infringement suits against each other.

The competing lawsuits were settled with the two firms agreeing to cross-license large portions of each other's patent portfolios, including Microsoft's (NASDAQ: MSFT) back-end server infrastructure, according to a statement by the Windows maker.

Although the terms of the deal were not revealed, Microsoft did say in a statement that Salesforce (NYSE: CRM) would also pay it an undisclosed amount in regard to Microsoft's patents for operating systems, cloud services and customer relationship management software during the term of the agreement.

"We are pleased to reach this agreement with Salesforce.com to put an end to the litigation between our two companies," Horacio Gutierrez, deputy general counsel of intellectual property and licensing at Microsoft, said in the statement.

The tiff began in May when Microsoft sued Salesforce for infringement on nine of its patents, most of which had been issued back in the late 1990s and early 2000s.

A month later, Salesforce's legal team countersued Microsoft with their own claims of patent infringement. Salesforce said in its suit that Microsoft had infringed five of its patents, dating between 2004 and 2007.

A spokesperson for Salesforce was not available to comment on today's settlement by press time.

It's not the first time that Microsoft has swung its patent portfolio at competitors or others it viewed as infringing its intellectual property -- witness the longstanding tensions between the Redmond software giant and the open source Linux community.

The company typically characterizes such moves as requirements by shareholders and patent law for it to vigorously defend its intellectual property.

"Microsoft's patent portfolio is the strongest in the software industry and is the result of decades of software innovation. Today's agreement is an example of how companies can compete vigorously in the marketplace while respecting each other's intellectual property rights," Gutierrez said.

But in recent years, the company has also become a prime target for smaller firms that have claimed it infringed on their properties. Early this year, Microsoft settled a patent dispute with BackWeb Technologies and two patent-related lawsuits with VirnetX over VPN technologies.

Microsoft has also been busy engaging in cross-licensing deals in other areas beyond traditional PC and server software. In February, for instance, Microsoft signed a cross-licensing deal with Amazon.com (NASDAQ: AMZN) regarding some of the e-tailer's technologies used in its Kindle e-book reader and Linux servers.

The deal resulted in Amazon making a cash payment of undisclosed size to Microsoft. No other details were revealed in that settlement either.

Stuart J. Johnston is a contributing writer at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.

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