As part of the deal, Streambox has agreed to obey RealNetworks' copyrights when developing new products. More specifically, Streambox will stop letting its Streambox Ripper software transform RealMedia streams into alternative formats and will modify its Streambox VCR to respect the copyrights of the RealSystem video player.
In addition, Streambox will stop distributing its Ferret software plug-in, which allows people to search on its own engine as opposed to other search engines by embedding a button on RealNetworks' popular RealPlayer.
It also will pay RealNetworks an undisclosed sum of money. Financial details were not disclosed.
Copyright protection on the Internet for audio and video content has been a sore spot for both technology companies and traditional content producers. The recording industry has taken several high-profile legal steps to punish technology companies such as Napster and MP3.com for allegedly violating copyrights.
RealNetworks and Streambox, both based in Seattle, declared that it's time to move beyond the legal tussle and into a new era of cooperation.
"We are pleased to be working with RealNetworks to put this behind us and to bring the creative energies of our software developers together with the leading company in digital media distribution," Bob Hildeman, CEO of Streambox, said in a statement.
Steve Banfield, general manager for RealPlayer at RealNetworks, said in a statement that Streambox will be "welcomed" by its own users when the companies jointly develop new products.
The settlement ends a legal battle waged by RealNetworks to protect its popular software products from alleged misuse. RealNetworks in December 1999 took Streambox to federal court alleging that the rival software company violated the Digital Millennium Copyright Act (DMCA), which bars companies from distributing technology that can bypass copyright protection measures.
In January, a U.S. District Court issued a preliminary injunction barring Streambox from distributing two out of three products. Judge Marsha Pechman ruled that RealNetworks made a strong case that the Streambox VCR could be in violation of the DMCA.
The Streambox VCR records video and audio streamed over the Web through RealNetworks' media player. Although Streambox executives have argued that their product is analogous to the VCR, Pechman wrote in a January court brief that the software was designed to "circumvent the access control and copyright protection measures that RealNetworks affords copyright owners."