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Marimba, Novadigm Reach Patent Suit Settlement

A patent suit dating back three years was laid to rest Monday when business software makers Marimba Inc. and Novadigm Inc. reached an undisclosed settlement.

The rival firms avoided trial this week by reaching a peaceful conclusion.

In March of 1997, Novadigm had accused Marimba of infringing on its technology patent when Marimba released its flagship Castanet product suite. Novadigm said Marimba had lifted details of its "push technology," or automatic delivery of software upgrades across a network. A sexy topic three years ago, push has been supplanted by better technology.

As is the case for many of these cases, the defendant reacted shocked and outraged: Marimba filed a countersuit in July of 1999, claiming that Novadigm infringed on a Marimba patent involving the distribution of code for updates.

Marimba's Vice President of Corporate Communications Susan Woods told InternetNews.com Monday that neither firm could discuss any terms of the deal, nor could they grant interviews for reactions about it, though one must think that each party is relieved -- patent infringements can cost as much as $1.5 million dollars even before they reach judgement day in court.

Novadigm was only slightly more forthcoming when contacted. Founder and Chief Executive Officer Albion Fitzgerald said only that Novadigm was "quite happy to have reached this decision."

Patent lawyer Larry Gotts, of Shaw Pittman, told InternetNews.com the settlement was not surprising.

"We usually see settlement in 95 percent of these cases," Gotts said. "What is surprising is that the technology involved seems to evolve faster than the time it takes to actually get to trial."

Gotts said many cases reach conclusions before trial despite the fact that significant money has been spent in the pre-trial time frame.

The closure could not have come at a better time for Marimba, which posted a larger-than-expected loss in its third quarter last month. Marimba lost $3.6 million, or 15 cents per diluted share, compared with a loss of $164,000, or 1 cent per diluted share, during the same period the previous year.

Financial analysts had forecast a loss of 14 cents per share, according to First Call/Thomson Financial.

The firm did not fare any better in the previous quarter, when Chief Financial Officer Fred Gerson resigned in April and chief executive officer and co-founder Kim Polese stepped aside to make room for John Olsen, a skipper with more operations experience.

Marimba looked to combat its decline with the October launch of Marimba.net, a division that will focus on subscription-based application deployment.



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