Apple filed the suit in May, accusing Sorenson of breaking a $4.5 million agreement by providing portions of its codec (used in QuickTime) to Internet application's developer, Macromedia. Sorenson denied the claim, saying the compression software used in Macromedia Flash Player was different from that used by Apple in QuickTime.
In July, Sorenson Media counter-claimed against Apple, citing an email from Apple CEO Steve Jobs that allegedly claimed that Apple had exclusive rights to past, but not future versions of codecs produced by Sorenson. The stage looked set for a costly legal tousle.
Yesterday's settlement "provides for the dismissal of all claims and counterclaims", the companies said in a joint statement.