Sep. 3--Microsoft Corp. reached a settlement with a Tucson firm that accused the software giant of infringing on patented digital-imaging technology, heading off a jury trial.

Terms of the deal weren't disclosed.

But Tucson-based Research Corporation Technologies Inc. had sought damages of potentially hundreds of millions of dollars from Microsoft for landmark technology that has been licensed to some of the world's biggest computer brands.

Research Corporation Technologies, also known as RCT, sued Microsoft in 2001 in U.S. District Court, saying Microsoft was wrongly using the technology in its Office and Windows software.

The Tucson company claimed in court papers it was entitled to 67 cents for each of more than 427 million units of Microsoft software sold, or about $286 million. Microsoft maintained it didn't infringe any of the patents and contended that all three were invalid.

"The only thing I can say is that it is settled. Terms are confidential," RCT Chairman Gary M. Munsinger said Wednesday in Tucson.

Kevin Kutz, a Microsoft spokesman in Washington, D.C., and Jeffrey Willis, a Tucson attorney on the Microsoft legal team, also declined to discuss the disputed technology.

"We're going to let the settlement and the resolution of the case speak for itself," Kutz said.

RCT, a technology licensing and management firm, acquired its patented technology after researchers at the University of Rochester developed it.

Known as the "Blue Noise Mask," RCT said it combines high image quality with high-speed rendering of halftones, or screened images.

Microsoft initially won at the District Court level in 2006 when U.S. District Court Judge Manuel Real granted the company summary judgment, finding the RCT patents invalid and unenforceable.

But in August 2008, a federal appellate court reversed the judge's ruling, removed him from the case and remanded the case to a new judge. The appellate court found that Real did not go far enough in his analysis.

Dale Regelman, a Tucson patent attorney who followed the case but was not involved with either side, called the procedural history "very unusual," especially the replacement of the District Court judge with another from out of state.

"That part caught me by surprise," he said. "Talk about protracted litigation."

Matt Rosoff, an analyst with the Kirkland, Wash.-based firm Directions on Microsoft, said the computer giant normally is battling dozens of patent infringement lawsuits, some for no other reason than that its deep pockets make it a good target.