Well, yeah, it was an offer of 100,000 shares of pre-IPO stock for $1 million that wound up being worth $16 million.
>There was no agreement that Apple was allowed to use the technology.
Right, they agreed to give a demo of their tech. Apple didn't use their technology, they saw ideas and created their own unique implementation that went far beyond the Star interface (and they hired some PARC employees). Xerox wasn't given what amounted to $16 million to visit the cafeteria, they knew what they were doing. After Xerox got a new CEO they filed their suit as a followup to exploit Apple's suit against MS in case they won.
>Microsoft did pay Apple for the rights to use Macintosh-style interfaces
MS paid Apple for some rights (with the license really tied to giving MS early access to develop apps for the Mac), and Apple filed suit over the MS implementation since they interpreted the license as limited, while MS exploited it as unlimited and Apple screwed up the dating in the agreement expecting an earlier ship date. MS completely screwed Apple in that deal. The eventual suit Apple filed was what triggered Xerox to file suit.
>Those claims would have been terrible for the software industry if upheld, not just in this particular case, but many others.
Yes, it's a good thing those claims weren't upheld. Though, had MS not pulled their Machiavellian stunt the suit wouldn't have been filed in the first place.