Network security rivals, Network Associates Inc (NAI) and RSA Data Security Inc have kissed and made up in the form of a settlement of their licensing disputes, one of which has been ongoing for more than a year. The original dispute arose between RSA and Pretty Good Privacy, which was then acquired (with the lawsuit) in December last year by NAI. RSA sued in May of last year for the alleged violation of an agreement between PGP and Public Key Partners – a partnership between RSA and Cylink Corp – which granted PGP a license to certain technologies. RSA alleged that PGP’s license had expired, but PGP carried on selling the products anyway and RSA thus demanded the royalties from those sales. PGP said the license agreement was still valid and therefore no royalties were due. Now the companies have agreed that NAI will use part of a fund set aside at the time of the PGP acquisition to pay RSA undisclosed past royalty fees and the company’s legal fees in return for dropping three federal court actions and the ending of court-ordered arbitration. NAI’s Peter Watkins, general manager of the Net Tools Secure division emphasized that the agreement will have no financial impact on Network Associates, because the money was part of the amount NAI paid for PGP. Then two weeks ago RSA sued NAI again, this time over the licensing agreement it has with Trusted Information Systems Inc (TIS), which is also now part of Network Associates. TIS uses RSA’s BSafe technology in most of its products, including its flagship Gauntlet firewall. But the licensing agreement specified that RSA has to re-approve the use of the technology should TIS be acquired, which it had not done. The agreement has settled that issue as well. NAI has taken out new license for RSA’s BSafe and BCert for its PGP Client, RecoverKey, Gauntlet Firewall, Gauntlet VPN and PGP Certificate Server, all of which are part of NAI’s total network security suite. Watkins says NAI will offer all those products with the Diffie-Hellman based encryption it owns, and, where appropriate with RSA’s encryption as an add-on for a small premium. Watkins and RSA chief operating office Al Sisto insisted that there was never really any animosity between the two companies and it is all moonlight and roses now, pinning any blame on the people at PGP. But that’s not the impression RSA founder, president and CEO Jim Bidzos gave us a couple of weeks ago when the company issued the new lawsuit. He said at the time that RSA has not had a lot of luck negotiating with Network Associates. Network Associates shares fell on the news, closing down $2.00, or 4.9% at $38.8125 and, although it could be argued it was a bad day for technology stocks all round, it was also the day NAI’s three-for-two stock split came into effective, which is normally an upside factor. RSA is a subsidiary of Security Dynamics Inc and Network Associates is the result of the merger last year between McAfee Associates Inc and Network General Co.
