Microsoft Corp. today announced an agreement with Sun Microsystems to settle both the October 1997 lawsuit filed by Sun and the Microsoft counter suit in the dispute over the Java technology license agreement between the two companies.

"Microsoft is very pleased with the successful conclusion of this litigation," said Tom Burt, deputy general counsel for litigation at Microsoft. "This settlement will not impact our customers or current products in any way and will allow us to focus our time and resources on what we do best: developing great software."

The technology license and distribution agreement was signed by the parties in March 1996 and was due to expire in two months. Under the terms of the settlement, the existing technology license agreement between the two companies is terminated. Microsoft can continue to ship all current products and those in beta containing Sun's technology for a period of seven years and in return agrees to pay Sun $20 million. Microsoft agreed not to use Sun's Java Compatible trademark, which it has not done since 1998.