Sony Corp. and Ampex Corp. have agreed to end their dispute over a patent covering thumbnail images in digital image storage and retrieval devices.

Under the agreement, Sony will pay Ampex US$40 million, Ampex said Monday.

In return, Ampex will withdraw charges made against Sony with the U.S. International Trade Commission (ITC) and in the U.S. Federal District Court for the District of Delaware, and allow Sony to use the patents in question in its products until April 2006. After that time, the agreement provides for a royalty fee based on the number of digital video tape recorders and digital still cameras produced and the extent to which they rely on the technology covered in the patents.

The litigation concerned U.S. patent 4,821,121, said Aki Shimazu, a spokeswoman for Sony in Tokyo on Tuesday. The patent, titled "Electronic still store with high speed sorting and method of operation" covers the use of thumbnail images and was filed by Ampex in 1987.

Ampex has also been pursuing other companies with respect to the patent.

On Oct. 20, the company said it had signed two licensing agreements, one each with Canon Inc. and Sanyo Electric Co. Ltd. Combined, Ampex will receive about $11.6 million covering royalties on products made prior to July 1 this year and then running royalties on subsequent products. Ampex said one of the licensees will also pay it $13.5 million on royalties for products sold through March 2006 although did not identify which company.

A day later, Ampex filed lawsuits against Eastman Kodak Co. at the ITC and the Delaware court over the same issue. On Monday, it threatened Kodak with additional litigation if its unable to conclude a licensing agreement.

IDG News Service

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