HP Settles Suit with Intergraph

HP and Intergraph settled their differences, with HP agreeing to pay $141 million to Intergraph to end a long-running patent dispute.

Hewlett-Packard Co. and Intergraph Corp. settled their differences Friday, with HP agreeing to pay $141 million to Intergraph to end a long-running patent dispute.

HP will pay Huntsville, Ala.-based Intergraph $141 million by Jan. 28 to settle a dispute over the so-called "Clipper" patents, which has been the focus of disputes and later settlements with Advanced Micro Devices Inc., Dell Inc., Intel Corp. and Gateway Inc. Litigation between HP, of Palo Alto, Calif., and Intergraph dates back to 2002.

The terms of the settlement also provide for the dismissal of all pending legal actions between Intergraph and HP as well as a cross-license to HPs patent portfolio, Intergraph said. However, Intergraph will receive only those patents that are specific to its current business, visualization software.

"We are very pleased to have fully resolved all of our pending OEM patent litigation with the HP settlement," said Halsey Wise, president and chief executive of Intergraph, in a statement. "We believe that the settlement with HP is in the best interest of our shareholders, and we are pleased to have received a license to HPs extensive patent portfolio for our fields of business. Intergraphs intellectual property protection and enforcement efforts have produced approximately $860 million of pre-tax income since 2002."

Intergraph, which exited the hardware business for software and services several years ago, began several actions trying to receive some value from its patent portfolio, which has been the subject of legal disputes for several years. The company said it would continue those actions, if necessary, to realize the full value of its patent portfolio.

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.

HP said it will take a charge of 3 cents per share in its current quarter to settle the litigation.


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