TGPTNDR: I believe they are continuing further litigation under some sort of cap-No?
Reuters Technology
Intel to Pay $300 Million in Intergraph Resolution
By Daniel Sorid
NEW YORK (Reuters) - No. 1 microchip maker Intel Corp (NasdaqNM:INTC - news) will pay $300 million to resolve claims by Intergraph Corp. (NasdaqNM:INGR - news) that its Pentium line of microprocessors infringes on five of Intergraph's patents, the companies said on Monday.
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Under the agreement, Intergraph will also license to Intel the patents included in the lawsuit for an unspecified period of time, and will transfer ownership of certain unrelated patents to Intel.
The actions close the door on a long battle between the former allies, who once collaborated on the sale of Pentium-based computer workstations. In 1997, Intergraph sued Intel, claiming it used anti-competitive and coercive measures to use Intergraph's patents royalty-free.
Antitrust claims were later dismissed by the courts, but Intergraph pursued its allegations of patent infringement against Intel. At one point, Intergraph estimated damages at more than $2 billion, based on a small percentage of sales of Pentium processors.
Intergraph later exited the computer hardware business, and now focuses on technical software and services.
As part of the agreement, Intel, based in Santa Clara, California, said it will take a one-time charge on first-quarter earnings of about $150 million, representing about half of the $300 million payment. Intel is to report its first-quarter earnings on Tuesday.
The $300 million payment is relatively insignificant for Intel, which has billions of dollars of cash in its coffers, analysts said.
``When you're filthy rich and you can afford to buy your way out of a problem, then you don't really have a problem,'' said Needham and Co. semiconductor analyst Dan Scovel.
Shares of Huntsville, Alabama-based Intergraph, which shot up on April 10 after it disclosed that talks between the companies were continuing, dropped $1.88, or 11.1 percent, to $15.02 on Nasdaq. Intel shares fell 28 cents, or 1 percent, to $28.11.
The companies failed to resolve the separate suit brought by Intergraph in the U.S. District Court in Marshall, Texas. In that suit, Intergraph claims that Intel's Itanium processor for computer servers infringes on its patents.
Intel and Intergraph, however, did agree to cap the value of damages at $150 million should Intergraph prevail in that suit. If Intel should lose an appeal of an Intergraph victory, it could be liable for up to $250 million in damages.
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