Intel to Pay Intergraph $225 Million

Giant chipmaker Intel Corp. will pay former workstation maker Intergraph Corp. $225 million to settle a patent dispute over technology in Intels Itanium microprocessors.

Intergraph sued Intel in 2001 in a case around Intergraphs PIC (Parallel Instruction Computing) patents, which the Huntsville, Ala.-based company claims Intel infringed in the development of its IA-64 processors, known as the Itanium family.

Under the terms of the settlement, announced Tuesday, Intel will buy a license to Intergraphs PIC technology. In return, Intergraph signed a covenant forbidding it from suing Intel customers for products that include Intel microprocessors, chipsets and motherboards.

Also as part of Tuesdays settlement, Intergraph resolved its related dispute with Dell Inc. Intergraph in 2002 sued Dell, along with Gateway Inc. and Hewlett-Packard Co., in a Texas district court for allegedly infringing on Intergraphs C5 Clipper processor system patents.

Dell, of Round Rock, Texas, claims it has an indemnity agreement with Intel that protects it against Intergraphs suit. Intel does not agree with this interpretation of the agreement, but has opted to handle the matter privately rather than in court, said Dell spokesman Chuck Mulloy.

Intergraph will continue its case against HP and Gateway, which is set for trial on Aug. 2.

Intergraph first sued Intel in 1997 for allegedly illegally obtaining technology Intergraph developed for its Clipper processor and integrating it into Intels Pentium architecture. In 2002, Intel, of Santa Clara, Calif., agreed to pay Intergraph $300 million and to buy selected patents from Intergraph and license other technologies from the company.

Since filing its first case against Intel, Intergraph has exited the hardware business and now sells software and services.