From Sun (in an update we received from analyst relations):

While the case was not litigated to conclusion on the merits, it is worth noting that the patent infringement and trade secret claims against Azul grew larger during the pendency of the case. In light of mounting evidence that Azul employees were in possession of Sun Confidential and Proprietary information, Azul came to the realization it would be better to return to negotiations and settle the claims, rather than continue with the lawsuit they initiated.

From Azul (in a letter from Scott Sellers, their COO):

Since the lawsuits were filed over a year ago, our conviction that we would be victorious only grew stronger. While Sun continued to add to the quantity of patent and trade secrets in dispute, we felt the quality of their case continued to remain weak, and believed the assertion of these claims against us was competitively motivated. And as a result of several Court rulings, including a ruling in December where Sun acknowledged that all of the then identified trade secrets they alleged Azul misappropriated were actually now in the public domain, our Board and investors remained committed to the path of litigation.

I couldn't have spun it better myself.