PC Accessory Firm Settles Its Microsoft Suit

Z-Nix Co., the small Pomona personal computer accessory maker that last week sued PC software giant Microsoft for restraint of trade and breach of contract, said Monday that the two companies have resolved the dispute that led to the lawsuit.

Under terms of the settlement, Microsoft has agreed to issue a license to Z-Nix to use Microsoft’s popular Windows software through the end of 1991. The two companies said they would negotiate a renewal when the first license expires. Both companies said they were pleased by the terms of the settlement, but neither would reveal its details.

Z-Nix, which makes computer point-and-click devices known as mice, sued Microsoft last Wednesday for at least $4.5 million.

The suit alleged that Microsoft, after agreeing to license Windows software to Z-Nix for $27.50 per copy, sought to double that fee when the Pomona company wanted to pair the software with its own product, a mouse device used to point to material on personal computer screens. Z-Nix alleged that Microsoft’s fee hike was designed to price Z-Nix out of the market and protect its own brand of competing PC mouse devices. Z-Nix representatives labeled Microsoft’s actions “unfair business practices” and said the $1-billion-a-year company was stifling innovation in the PC industry.

But Monday after resolving the dispute, Z-Nix said it would withdraw its suit and the allegations about Microsoft’s business conduct it made when publicizing the suit.