By Stephen Shankland

Staff Writer, CNET News.com

Published: March 1, 2006, 10:43 AM PST

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Quantum has agreed to pay Sun Microsystems $25 million to settle a patent infringement lawsuit brought by Storage Technology, a tape storage company Sun acquired in 2005.

Under the terms of the settlement, the companies agreed to cross-license a limited number of each others` patents and settle all legal claims, the companies said Tuesday. Quantum will pay Sun $20 million this quarter and $5 million over the next five quarters.

StorageTek sued Quantum in August, after Sun announced in June it planned to acquire the company for a net amount of about $3 billion but before the deal closed in August.

``Quantum agreed to settle after considering the benefits of the cross license agreement, the additional legal costs we would have incurred in proceeding with the trial, the uncertainty inherent in any jury case and the potential impact on our business if we lost in court,`` Quantum Chief Executive Rick Belluzzo said in a statement.

``The patent cross license agreement demonstrates the commitment of Quantum and Sun/StorageTek to building a stronger business partnership centered on meeting customers` storage and data protection needs,`` he said.