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Phil Katz was a graduate of Nicolet High School in Glendale, Wisconsin. Katz graduated from the Computer Science Engineering program at the University of Wisconsin–Milwaukee. After his graduation, he was hired by the Allen-Bradley company as a programmer. He wrote code to run programmable logic controllers, which operated manufacturing equipment on shop floors worldwide for Allen-Bradley's customers.

On April 14, 2000, at the age of 37, Katz was found dead in a hotel room with an empty bottle of peppermint schnapps in his hand. A coroner's report stated his death was a result of acute pancreatic bleeding caused by chronic alcoholism.

Katz battled alcoholism for years. The earliest known arrest occurred in 1991. About a year later, Katz was again convicted of drunk driving. Between 1994 and September 1999, Katz was arrested five times for operating after suspension or revocation of his driver's license.

Katz was adamantly opposed to Microsoft Windows in the early 1990s. This led to PKWARE missing out on the opportunity to be the first to bring PKZIP to the platform.

On August 2, 1988, the plaintiff and defendants announced a settlement of the lawsuit, which included a confidential cross-license agreement. Under the agreement, SEA licensed PKWARE for all the ARC-compatible programs published by PKWARE during the period beginning with the first release of PKXARC in late 1985 through July 31, 1988, in return for an undisclosed payment. PKWARE agreed to pay SEA to obtain a license that allowed the distribution of PKWARE's ARC-compatible programs until January 31, 1989, after which PKWARE would not license, publish or distribute any ARC compatible programs or utilities that process ARC compatible files. In exchange, PKWARE licensed SEA to use its source code for PKWARE's ARC-compatible programs. PKWARE also agreed to cease any use of SEA's trademark "ARC" and to change the names or marks used with PKWARE's programs to non-confusing designations. The remaining details of the agreement were sealed. In reaching the settlement, the defendants did not admit any fault or wrongdoing. The Wisconsin court order showed the defendants were ordered to pay damages to the plaintiff for the defendants' acts. Namely, the defendants were found to be infringing the plaintiff's copyrights, infringing trademark, as well as performing acts of unfair trade practices and unfair competition.

Katz left Allen-Bradley in 1986 to work for Graysoft, a Milwaukee-based software company. At the time, he had worked on an alternative to Thom Henderson's ARC, named PKARC. ARC was written in C, with the source code available on System Enhancement Associates' bulletin board system (BBS). PKARC, written partially in assembly language, was much faster. Katz had a special flair for optimizing code. Besides writing critical code in assembly language, he would write C code to perform the same task in several different ways and then examine the compiler output to see which produced the most efficient assembly code. He first publicly released only PKXARC, an extraction program, as freeware. Its much greater speed caused it to spread very quickly throughout the BBS community. Strong positive feedback and encouragement prompted Katz to release his compression program, PKARC, and eventually to make his software shareware. Katz founded PKWARE, Inc. (Phil Katz Software) in 1986, with the company's operations located in his home in Glendale, Wisconsin, but he remained at Graysoft until 1987. Steve Burg, a former Graysoft programmer, joined PKWARE in 1988.

In the late 1980s, a dispute arose between System Enhancement Associates (SEA), maker of the ARC program, and PKWARE. SEA sued Katz for trademark and copyright infringement. The most substantial evidence at trial was from an independent software expert, John Navas, who was appointed by the court to compare the two programs. He stated that PKARC was a derivative work of ARC, pointing out that comments in both programs were often identical, including spelling errors.

Phillip Walter Katz (November 3, 1962 – April 14, 2000) was a computer programmer best known as the co-creator of the Zip file format for data compression, and the author of PKZIP, a program for creating zip files that ran under DOS. A copyright lawsuit between System Enhancement Associates (SEA) and Katz's company, PKWARE, Inc., was widely publicized in the BBS community in the late 1980s. Phil Katz's software business was very successful, but he struggled with social isolation and chronic alcoholism in the last years of his life.