A settlement, as well as dealing with the dispute between the parties is a contract between those parties, and is one possible (and common) result when parties sue (or contemplate so doing) each other in civil proceedings. The plaintiff(s) and defendant(s) identified in the lawsuit can end the dispute between themselves without a trial. Justice is not a central issue here, merely power: often one party has little option but to submit to the will of the other.

The contract is based upon the bargain that a party foregoes its ability to sue (if it has not sued already), or to continue with the claim (if the plaintiff has sued), in return for the certainity written into the settlement. The courts will enforce the settlement: if it is breached, the party in default could be sued for breach of that contract. In some jurisdictions, the party in default could also face the original action being restored.

The settlement of the lawsuit defines legal requirements of the parties, and is often put in force by an order of the court after a joint stipulation by the parties. In other situations (as where the claims have been satisfied by the payment of a certain sum of money) the plaintiff and defendant can simply file a notice that the case has been dismissed.

The majority of cases are decided by a settlement. Both sides (or the side with fewer monetary resources) often have a strong incentive to settle to avoid the costs (such as legal fees, finding expert witnesses, etc.), associated with a trial, particularly where a trial by jury is available. Generally, one side or the other will make a settlement offer early in litigation. The parties may hold (and indeed, the court may require) a settlement conference, at which they attempt to reach such a settlement.

In controversial cases, it may be written into a settlement that both sides keep its contents and all other information relevant to the case confidential.

Generally, when a settlement is reached in the U.S., it will be submitted to the court to be "rolled into a court order". This is done so that the court which was initially assigned the case may retain jurisdiction over it. The court is then free to modify its order as necessary to achieve justice in the case, and a party that breaches the settlement may be held in contempt of court, rather than facing only a civil claim for the breach. In cases where confidentiality is required by the parties, the court order may refer to another document which is not disclosed, but which may be revealed to prove a breach of the settlement.

http://en.wikipedia.org/wiki/Settlement_%28litigation%29

Agreed, a basic overview, but all points are covered.

An example...

Operating Systems and Servers News

25 October 2007

Transmeta wins big in Intel patent suit

By Agam Shah, IDG News Service

Under the agreement, Intel will pay Transmeta $150 million initially, and $20 million in each of the next five years. In exchange, Intel will be granted a right to license Transmeta patents for use in future products. It will also end pending patent litigation between both companies and release all claims between them.

Transmeta sued Intel in October last year, claiming some Intel processors violated 10 Transmeta patents covering processor design and power-efficiency techniques. Nine patents covered basic processor functions like scheduling and addressing instructions on a chip, and the tenth related to Transmeta’s LongRun technology, used to adjust a processor’s voltage based on its workload.

In January, Intel countersued Transmeta for infringing seven patents, also alleging Transmeta withheld and mischaracterised information about other patents and technologies in its patent applications.

Under the agreement, Intel will be in a binding agreement not to sue Transmeta for the development and licensing of LongRun technology to third parties, Transmeta said in a statement.

Transmeta, founded in 1995, tried to break Intel’s dominance in the notebook PC market with its Crusoe processor, which allowed PCs to run longer by reducing power consumption. Consumers responded poorly to the processor, leading to Transmeta changing its business model to licensing its technology.

The settlement pumped life into Transmeta’s stock, which rose 253.11 percent to $14.76 on the Nasdaq stock exchange. The company faced delisting in March when its stock price dropped to under $1.

Transmeta reported a net loss of $11.5 million and revenue of $171,000 for the most recent quarter ending June 30. Earlier this year, Intel’s rival Advanced Micro Devices invested $7.5 million in the cash-strapped Transmeta.

Intel’s settlement agreement will realise immediate financial value for Transmeta’s intellectual-property rights and will support the company’s technology development and licensing business, said Les Crudele, the president and CEO of Transmeta in a statement.

Intel could not be reached for comment.

 http://www.techworld.com/opsys/news/index.cfm?newsid=10444&pagtype=samechan

It would therefore appear, as a point of law, there are no winners. To the general investing public, however, there is a winner.

Be well