Microsoft has reached a licensing agreement with networking technology vendor Alacritech ending a year-long court battle. The dispute prevented Microsoft from selling its TCP Chimney software, following an injunction.

Alacritech sued Microsoft in August 2004, alleging that Microsoft's developing TCP offload architecture, code-named Chimney, violated Alacritech's patents on its SLIC (session-layer interface control) technology architecture. A federal judge granted Alacritech's preliminary injunction request in April, barring Microsoft from using or selling Chimney.

Alacritech has now entered a patent cross-licensing deal with Microsoft and one of Microsoft's development partners, Broadcom, which showed off a working TCP Chimney implementation at Microsoft's 2004 Windows Hardware Engineering Conference. The agreement includes fees, for undisclosed amounts, to be paid to Alacritech by Microsoft and Broadcom, Alacritech said.

TCP offload technology like Chimney allows an operating system to shift processing of TCP networking tasks from a machine's CPU (central processing unit) to a specialised network device. By freeing up resources, the architecture can improve overall application performance. Broadcom claimed preliminary benchmark tests showed its TCP offload engine, in conjunction with Microsoft's TCP Chimney software, improving CPU utilization on a server by up to 400 percent.

Microsoft developed Chimney with an eye toward including it in Longhorn, its Windows update due out next year. It also planned to incorporate the technology in its Scalable Networking Pack for Windows Server 2003, which was scheduled for release in late 2004, but postponed.

A Microsoft spokesman said the company now plans to release the Scalable Networking Pack in early 2006. He cited the legal tangle with Alacritech as the main factor behind the software's delay.