UPDATED: Three days after a jury found Sun Microsystems had infringed on Eastman Kodak patents, the two parties settled their lawsuit out of court.

For $92 million, Sun doesn't have to face the prospect of paying up to $1.06 billion in damages for infringing on Kodak's software patents. In a statement Thursday afternoon, Sun officials said Java users won't have to worry about the three patents licensed for the Java programming language.

"We are eager to put this punitive litigation behind us, to have reached a decision in the best interest of our stockholders, customers and employees, and to focus our future activities on the evolution of the Internet and Sun's place within it," said Jonathan Schwartz, Sun president and COO, in the statement.

Arguments were scheduled to begin Thursday to determine how much damage Kodak incurred from the infringement of three of its patents used in the Java programming language.

"We achieved our goals in this case, which was to protect our intellectual property rights," Willy Shih, Kodak senior vice president, said in a statement. "We are pleased that the Court has validated these fundamental Kodak patents and we now look forward to building a more productive relationship and continued collaboration with Sun, with whom we have enjoyed a close partnership for nearly two decades."

Since Monday, both sides have been positioning themselves to reap whatever benefits they could in the damages portion of the trial. Lawyers for Sun filed court documents Monday requesting the court recognize the company never intentionally infringed on its patent Technology License and Distribution Agreement (TLDA) with Kodak, which acquired the software patents on software communication between two or more applications from Wang Laboratories in 1997.

Late Thursday morning, a document appeared on the docket stating the two sides had settled their case out of court. Shortly thereafter, Judge Michael Telesca of the U.S. District Court for the Western District of New York in Rochester signed an order dismissing the case, "with prejudice," which means Kodak cannot file the lawsuit anywhere else without risking a dismissal of its claim. The court will also oversee the "effectuation" of the agreement, according to the court document.

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