* Microsoft (nasdaq: MSFT - news - people ) says TomTom to make payments

* Financial details of settlement not disclosed

(Adds background on dispute, share prices)

SEATTLE (Reuters) - Microsoft Corp and Dutch navigation device maker TomTom NV said Monday they had reached a settlement after more than a year of squabbling over software patents.

In the last few weeks, both companies had sued the other, claiming patent infringement.

Under the terms of a five-year agreement, Microsoft said TomTom will pay Microsoft for use of the eight car navigation and file management system patents in the case Microsoft brought against TomTom, while Microsoft will be able to use the four patents included in the TomTom countersuit without any payment to TomTom.

TomTom confirmed there was a settlement but declined further comment.

Specific financial terms of the agreement were not disclosed.

The world's largest software company in February sued in federal court in its home state of Washington and petitioned the U.S. International Trade Commission claiming TomTom -- which makes portable navigation devices for cars and mapping software for handheld computers -- breached eight of its patents.

Microsoft said the patents involved in the case related to innovations in car navigation technology and other computing functionality that Microsoft has licensed to other companies, such as TomTom's rival Garmin Ltd. (nasdaq: GRMN - news - people )

TomTom countersued in the U.S. District Court for the eastern district of Virginia, earlier this month, claiming Microsoft violated a number of its patents.

Microsoft shares slightly pared losses after the announcement, down 3.9 percent at $17.43 in a broad market decline. Ahead of the settlement announcement, TomTom shares closed at 3.413 euros in Amsterdam, down 7.2 percent. (Reporting by Bill Rigby; Editing by Tim Dobbyn)

Copyright 2009 Reuters, Click for Restriction

Google Settles with Authors

The search giant will pay $125 million to settle lawsuits stating it violated copyright law by scanning millions of books

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By Hardy Green

After more than two years of negotiation, Google (GOOG) has settled lawsuits filed by the Authors Guild and five publisher members of the Association of American Publishers against a Google program that has scanned millions of library books.

The agreement, subject to approval by the U.S. District Court for the Southern District of New York, provides for the establishment of a book-rights registry, through which scanned books can be viewed in part or in whole and payment made to copyright holders. As part of the deal, Google will pay $125 million to rights-holding plaintiffs and to cover legal fees. Of that amount, $30 million will go to set up the registry.

Google ran afoul of book publishers and authors when some of the libraries participating in its book-scanning program opted to scan full texts of copyrighted books (BusinessWeek.com, 10/20/05). Publishers argued that scanning an entire book without permission, and storing it on a Google server, violates copyrights. Google argued that because it's creating what amounts to a massive card catalog and would let users view only brief excerpts of books, it shouldn't have to get express permission to scan the books.

"A 21st-Century Solution"

All parties to the agreement expressed enthusiasm about the settlement during a conference call with reporters. "This could be the biggest book deal in U.S. publishing history," Authors Guild Director Paul Aiken said. "Millions upon millions of books will find a new home among readers online."

"This is an innovative, 21st-century solution," added Association of American Publishers Chairman and Bertelsmann Co-Chairman Richard Sarnoff. "The registry will function as an authoritative rights-holder database, distribute money, and mediate disputes."

David Drummond, Google's chief legal officer, noted that "7 million books are now searchable through Google Book Search, and we're looking forward to many times that number."

Payments Split Three Ways

The registry will manage two types of online book searches. Individuals will continue to view samples of in-copyright books much as they can today, and purchase the work online. Institutions such as colleges and universities can pay for subscriptions to the registry and have complete digital access to millions of scanned books. Participants in the conference call noted that the program will make it possible for small colleges and universities to have access to the trove of books in major research libraries at such institutions as the universities of California, Michigan, and Wisconsin, and Stanford University.

In all cases, payments will be split three ways, with Google getting 37% of the revenue and, after the subtraction of an administrative fee by the registry, the publisher and author splitting the remaining monies. Certain advertising revenues will also be shared with the rights holders, Drummond said, according to the same proportional split. But no ads will appear in the actual pages of books, he noted.

The registry is several months away from being a reality. Overall, the development seems likely to encourage the sale of books in bits and pieces, or "chunking," as the practice is coming to be known among book publishers, along with "transforming," or delivery of books in a variety of formats, including downloads to e-book readers or for print-on-demand. "The real victors are the readers," Google co-founder Sergey Brin said in a prepared statement. "The tremendous wealth of knowledge that lies within the books of the world will now be at their fingertips."

Lawsuits Date to 2005

The publisher plaintiffs, who filed suit against Google in October 2005, included Pearson Education, Penguin Group, John Wiley & Sons (JWA), Simon & Schuster, and the McGraw-Hill Companies (MHP), publisher of BusinessWeek. The Authors Guild class action was filed in September of that year.