Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Sun Drops the Gloves

Sun Microsystems (Nasdaq: SUNW  ) shareholders have one less headache to medicate thanks to management's wise decision to settle its patent infringement litigation with crusty old Eastman Kodak (NYSE: EK  ) . Earlier this month, a federal jury found that Sun's ubiquitous Java software violated patents Kodak had previously acquired from Wang Laboratories. (Stop your snickering. You'll get us both fired.)

Why is this wise? Because the $92 million payoff looks pretty cheap compared with the billion dollars Kodak was pushing the jury to consider. That would have eaten nearly a tenth of the firm's top line.

As described, the patented processes sound awfully vague: methods of inter-program communication for identifying common file types. It may remind some of us tech nerds of the drawn-out fight between Microsoft and former plugin tsar, Eolas Technologies. Had the patent office not invalidated the Eolas claim, firms as diverse as Apple (Nasdaq: AAPL  ) , Macromedia (Nasdaq: MACR  ) , Red Hat (Nasdaq: RHAT  ) , and others may have had substantial fixes to make or checks to write.

No surprise that in this era of FUD and counter-FUD, both sides are declaring victory. Kodak gets to flex its muscles for the public and snarl a warning to the whole tech world. Meanwhile Sun skips away with barely a shiner, pointing out that the hush money is just a drop in their bucket.

As a player in the open-source community, Sun will likely take its share of blows from purists who would have preferred that the firm go down swinging. Patent cases like these are one of the few times that the big money sees support from the Linux types -- at least until they drop the gloves and pay up. But investors should be glad that management just limited the damage. Often, it's better to be happy -- or even just satisfied -- than right.

For related Foolishness:

Seth Jayson has applied for patents on breathing, eating, and other innovative functions. Make your checks out to cash, please. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 502379, ~/Articles/ArticleHandler.aspx, 10/21/2016 7:55:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
AAPL $116.60 Down -0.46 -0.39%
Apple CAPS Rating: ****
KODK $14.89 Up +0.34 +2.34%
Eastman Kodak CAPS Rating: No stars