Quest Software has agreed to pay US$16 million plus additional royalties to Computer Associates to settle a lawsuit CA filed in 2002 that accused Quest of illegally using CA source code. The deal also resolves Quest counter-claims challenging the validity of some CA copyrights.

In its initial complaint, CA alleged that Quest employees who once worked for Platinum Technology International (which CA bought in 1999) shared with their new employer Platinum source code and knowledge of its software designs.

In July 2004, the US District Court for the Northern District of Illinois issued a preliminary injunction barring Quest from selling its Quest Central for DB2 software, although the company was allowed to continue maintenance and support to existing users. In a recent regulatory filing, Quest estimated that Quest Central for DB2 accounted for about 3 percent of its revenue in the first half of 2004.

Today's deal with CA allows Quest to resume selling Quest Central for DB2. Under the settlement's terms, neither Quest nor CA admitted wrongdoing.

Quest General Counsel Michael Vaughn said his company is pleased to resume selling its software and to leave behind the distraction and expense of litigation.