REALNETWORKS AND STREAMBOX SETTLE DIGITAL COPYRIGHT CASE; STREAMBOX TO LICENSE REALNETWORKS REALSYSTEM SDK TO CREATE COMPATIBLE SOFTWARE.

RealNetworks(R), Inc. (Nasdaq:RNWK) and Streambox, Inc., have announced that they have settled the federal lawsuit brought by RealNetworks against Streambox under the Digital Millennium Copyright Act in December 1999.

In January, the Federal District Court for the Western District of Washington enjoined the distribution of two Streambox products while the case was pending, but declined to issue an injunction against a third product.

Under the settlement, Streambox will develop future products that will operate in conjunction with RealNetworks' copy protection features. Specifically, Streambox agreed that it will modify its Streambox Ripper product so that it no longer transcodes RealMedia(TM) streams into other formats, and that it will modify its StreamboxVCR product so that it respects the copy protection feature in RealSystem(TM). RealNetworks will provide Streambox with a license to the RealSystem Software Development Kit, which Streambox can use to create future versions of Streambox products that will respect RealNetworks' copy protection technology.

As part of the settlement, Streambox also agreed to stop distributing the Streambox Ferret program, which altered the search functionality on RealNetworks' RealPlayer(R), and to pay RealNetworks an undisclosed sum of money. The parties did not release further details of the confidential settlement agreement.