We reported earlier this year ( here and here ) about a patent lawsuit between Yahoo! and Xfire concerning instant messaging technology. Xfire had a summary judgment motion scheduled for December 9, in which Xfire was going to argue that its technology does not infringe Yahoo!'s patents and therefore that Yahoo! does not have a cause of action. However, Xfire has recently requested that that hearing be postponed. Apparently the parties have agreed on key settlement terms, and hope to negotiate a final settlement themselves.
Reaching a mutually-agreeable settlement is often the main impetus behind lawsuits; the fact remains that parties are often not willing to come to the table until a court action is underway.