January 26, 2001, 4:59 PM — MICROSOFT AND ITS online travel spin-off Expedia have settled with Priceline.com over a pair of lawsuits dating back to 1999.
In October of 1999, Internet "name-your-price" retailer Priceline filed suit in the U.S. District Court in Connecticut against Microsoft and Expedia, claiming the duo had violated a Priceline patent and engaged in unfair trade practices. At issue were Microsoft's alleged infringement of Priceline's patent for buyer-driven commerce systems and its alleged violation of Connecticut's Unfair Trade Practices Act.
Priceline claimed that it gave Microsoft confidential information when the companies were considering a marketing tie-up that would likely have involved Expedia licensing Priceline's intellectual property. After those discussions broke down, Expedia launched its Hotel Price Matcher service, which Priceline alleged was similar to its existing price matching service and infringed its patent.
Under terms of the settlement detailed Tuesday, Expedia will continue to operate its Price Matcher service, which for some time has included flights as well as hotels. Microsoft's Expedia spin-off has also entered into a royalty arrangement with Priceline.
All legal issues Priceline had with Microsoft and Expedia are now at an end, the three companies said in a statement issued Tuesday. The details of the settlement agreement were kept confidential.
"We are pleased to put this behind us," said Microsoft spokesman Jim Cullinan. He added that the settlement reached was "good for both companies."
Norwalk, Conn.-based Priceline has had a rough time of it recently, announcing layoffs in both November and December of last year as well as delaying the introduction of some new services and abandoning plans to enter the Japanese market. The company's founder, Jay S. Walker, who held the position as Priceline vice chairman, also quit late last year.