Microsoft has reached an out-of-court settlement with software company Caldera.

The settlement is expected to cost Microsoft $155m and allows it to avoid an antitrust trial, which was due to start on 1 February.

The move might suggest that Microsoft is ready for a settlement in the antitrust case brought by the US government and 19 states.

Four-year dispute

For the past four years, Caldera has tried to prove that the software giant used anti-competitive tactics, in an attempt to damage sales of Caldera's software.

Caldera claimed that Microsoft built incompatibilities into Windows, to discourage computer users from buying its product.

Microsoft claimed that its software had better sales because it was a superior product.

Impetus to settle

Part of the impetus to settle may have been provided by the the outstanding antitrust case, brought by the Department of Justice.

Judge Jackson issued a blistering findings of fact last year saying that the company held a monopoly position, which it used to harm competition and consumers.

That case is now in settlement talks and is expected to return to court on 22 February.

Both sides stand to gain from a settlement said Robert Schlossberg, an antitrust lawyer with the Washington firm of Morgan, Lewis and Bockius.

Microsoft wants a resolution in the case, which has been a public relations nightmare for the software giant.

Mr Schlossberg said that the government also wants a settlement as it faces a less friendly reception at the court of appeal.

The court of appeals has ruled against in the government in past rulings relating to Microsoft.

Mr Schlossberg said the two sides remain far apart but added that federal mediator Judge Richard Posner's presence increased the possibility of an agreement. "If anybody can do it, Judge Posner can," he said