TomTom to pay Microsoft to end patent fight

REDMOND, Wash. -- Microsoft, the world's largest software maker, on Monday said it settled a patent dispute over car navigation technology with TomTom for an undisclosed amount.

In February, Microsoft filed lawsuits in U.S. District Court in Washington and with the International Trade Commission against TomTom NV and its U.S. subsidiary, TomTom Inc., claiming their car navigation systems infringed on patented technology that let vehicle computer systems run more than one application at a time, provide more natural driving directions and access the Internet, among other functions.

TomTom filed a countersuit earlier this month against Microsoft in U.S. District Court in Virginia, saying the software maker's Streets and Trips products for PCs infringe on four TomTom patents.

Under the terms of the five-year settlement, Redmond, Wash.-based Microsoft said TomTom will pay the software maker for use of eight patents. Microsoft will get coverage for the four TomTom patents without paying anything to the Amsterdam, Netherlands-based company.

The agreement covers past and future U.S. sales of both companies' products.

The deal also requires TomTom to remove some functions from its products within two years, including functionality related to naming, organizing and storing file data.

The companies said this allows TomTom to comply with its obligations as a member of the open source software community. Open source licenses vary, but generally require companies that build products with open source software to make all the resulting code available to the community. Microsoft's proprietary business model bars companies from releasing its patented code free of charge.

Shares of Microsoft fell 64 cents, or 3.5%, to $17.49 in afternoon trading amid a broader market sell-off.