Ariba Agrees to Pay $37 Million to Settle Patent Claims by EPlus

Ariba Inc., a maker of software that helps businesses manage costs, agreed Monday to pay $37 million to settle a patent-infringement lawsuit by competitor EPlus Inc.

A federal jury in Alexandria, Va., last week said Ariba had deliberately infringed three of EPlus’ patents, which could have led to a verdict of as much as $294 million at a hearing on damages that was scheduled for Monday.

Ariba’s shares, which fell as much as 18% on Feb. 8 after the jury’s infringement verdict, rose 16% on Monday. EPlus stock fell.

The lawsuit will be thrown out, and the companies agreed to drop all claims against each other, including those for past infringement, according to a statement issued by Ariba. Ariba and EPlus also agreed to cross-license their patents, ensuring that Ariba’s customers won’t be affected by EPlus’ infringement claims.

“We feel that it was critical that we put the matter behind us,” James Frankola, Ariba’s chief financial officer, said during a conference call with reporters and investors. “By moving quickly to put the matter behind us, we believe we could minimize any impact it might have.”

Ariba, whose customers include Best Buy Co. and PPG Industries Inc., said because of the accord it won’t need to provide software updates to customers designed to work around the EPlus inventions. The Sunnyvale, Calif.-based company agreed to pay the $37 million in three cash installments by March 31.

Shares of Ariba rose $1.36 to $9.63 in Nasdaq trading. It was the stock’s biggest rise since October. Shares of Herndon, Va.-based EPlus fell $2.38 to $13.21.

The settlement “is in the best interest of EPlus and our customers as it eliminates the uncertainty of the trial and inevitable appeals process which can take several years,” said Phillip G. Norton, EPlus’ chief executive.