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Settling in with Azul

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Sun Microsystems and start-up Azul Systems have settled their patent spat. Neither company will say squat about the settlement, leaving you wondering who came out the victor in this exercise.

As a recap, Azul, the maker of a Java server appliance, blasted Sun with a lawsuit in March 2006. It claimed that Sun sought to bully the young company over patents related to multi-threaded software, garbage collection and multi-core chips. Sun fired back with a lawsuit of its own in May of 2006, alleging that Azul infringed on its patents.

In many ways, the history behind these two companies proves more gripping that their actual spat. Azul's CEO Stephen DeWitt once worked at Sun after it bought Cobalt Networks – another server appliance maker headed by DeWitt – for $2bn.

The Cobalt deal has since gone down as one of Sun's biggest blunders. Having cancelled the entire Cobalt product line, Sun was forced to write down most of the acquisition cost. We can confirm that Sun Chairman Scott McNealy considers the phrase "you're a Stephen DeWitt" one of the worst insults a person can hurl at another human.

In addition, we understand that Sun chip engineer extraordinaire Marc Tremblay – a world class gymnast and hockey player – considered much of the IP in question to be his special babies. And when Tremblay wants blood, Sun listens. We think.

Anyhow, Sun and Azul seem awful quiet about their deal, even when quietness is expected in such matters. We can't figure out who won this thing at all.

"Now, after nearly fifteen months of litigation, the case has been resolved," said Sun's top lawyer Mike Dillon. "The specific settlement terms are confidential (not uncommon in a case like this) but, they are favorable to Sun. I think it's likely that Azul had a change of heart about the case once they viewed some particularly damaging evidence that was provided in discovery."

Okay, sure.

Meanwhile, DeWitt came out with this: “Sun is the clear and acknowledged inventor of Java and of associated multi-threaded systems. We have reached a settlement in the patent, trade secret and declaratory judgment cases, and all associated litigation between the companies has been resolved. In settling this case, we have reinforced our commitment to Java, and now look forward to working together with Sun to continue to bring innovative solutions to the Java community."

So maybe DeWitt had to admit that Sun invented Java on the record as part of the settlement? Small ouch.

In an interview, Azul co-founder and COO Scott Sellers told us the company is "very, very pleased" with the settlement. Azul simply wanted to cutback on its legal spending and seemed to reach a level of civility with Sun "where we were both willing to give some ground."

Azul rebuffed Sun's call to open source its Vega processor design and has not been forced to do so as part of the settlement.

Still, we've yet to hear anything about IP licensing from either company, and Azul still seems to be selling its Java appliances just fine. ®

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