A daylong mediation with Mr. Smith, of Seattle’s Smith & Leary P.L.L.C., produced a settlement in a $1.6 billion private lawsuit against Microsoft Corp. By then, the company apparently had strong incentives to settle rather than proceed with a Feb. 1 trial before a Salt Lake City federal jury: Results in three mock trials in Utah did not bode well for the defense on liability, according to sources familiar with the case.

The suit by Caldera Inc., a small Salt Lake City company that owns the rights to DR-DOS, a computer operating system that was once a Microsoft rival, had been dragging on since July 1996. Caldera Inc. v. Microsoft Corp., No. 96-CV-645 (D. Utah). A previous effort to mediate had failed. Last December, the parties hired Mr. Smith, a commercial litigator who chairs the alternative dispute resolution program at the Seattle federal court.

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