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Priceline settles suit
January 9, 2001: 5:44 p.m. ET

Priceline, Expedia and Microsoft settle suit over price matching technology
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NEW YORK (CNNfn) -, the Web site that enables consumers to "name their own price" for hotels and airline tickets, on Tuesday announced that it had settled two patent infringement lawsuits it had brought against the travel Web site Expedia Inc. and Microsoft Corp.

In October of 1999 Priceline (PCLN: Research, Estimates) had filed a complaint against Expedia (EXPE: Research, Estimates) and Microsoft (MSFT: Research, Estimates) alleging that the two companies infringed a Priceline patent by operating their "Hotel Price Matcher" service, and that their conduct towards Priceline violated the Connecticut Unfair Trade Practices Act. At the time of the lawsuit, Expedia was a wholly owned subsidiary of Microsoft, which continues to own 70 percent of the company.

graphicUnder the settlement announced after the close Tuesday, Expedia will continue to operate its Price Matcher services and has entered into a royalty arrangement with Priceline. and Priceline said they do not expect this arrangement to have a material impact on their respective businesses. 

"We believe this settlement is in the best interests of our companies," Priceline and Expedia said in a joint statement. "This settlement resolves all legal issues between the parties and allows us to move forward."

Details of the settlement agreement were not disclosed, and the companies said that they will make no comments on the terms of the settlement beyond those contained in a news release.

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Priceline uses an online reverse auction which allows customers to name the price they are willing to pay for a service or product. The company has come under enormous pressure recently after it issued an earnings warning and stopped offering groceries and gasoline through its service.

In after-hours trading, Priceline shares rose 44 cents, or 24 percent, to $2.25, while Expedia rose 16 cents to $10.03 graphic


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