"The Seattle Post-Intelligencer broke the story after obtaining a copy of the Eolas letter. The companies have yet to issue any official statements, but the settlement agreement closes the long-running court case between them over an Eolas patent that was said to apply to Microsoft's method of handling ActiveX controls on web pages."
Read arstechnica for more, and here for a bit of background.
KSR (LawPundit in this regard is cited at BlogRunner and see also the WSJ.com Law Blog)
and the US Supreme Court's new common sense approach to patents
surely were among the main patent "climate" factors leading to this settlement.
See in this regard O'Reilly Radar and "Microsoft Reaches Settlement on EOLAS Patent", which already anticipated this development in a July 31, 2007 posting.
See also our posting about New York Times agrees with us ....