Intel and Intergraph settle one of two suits

Intel Corp. has agreed to pay $300 million to settle a patent infringement lawsuit brought by software and services company Intergraph Corp., a former chip vendor, and could pay as much as $250 million more in damages in a second ongoing patent dispute, the companies said Monday.

Following court-imposed mediation, Intergraph settled its four-year-old lawsuit against Intel, which centered on chip technology that Intergraph, in Huntsville, Ala., said it developed. Intergraph was a chip vendor before it shifted its business to software and services. In a lawsuit originally filed in 1997 in the U.S. District Court in Birmingham, Ala., Intergraph charged that Intel used the technology without permission in its Pentium line of microprocessors.

While admitting no guilt, Intel agreed to pay Intergraph $300 million as part of the settlement and to purchase various chip technology patents from Intergraph that were not related to the case. Additionally, the two companies have agreed to license technology from each other, according to the statement.

Intergraph had originally sought damages from Intel totaling more than $2.2 billion.

With one suit settled, Intel and Intergraph are scheduled go to trial to resolve a second patent dispute filed in July 2001. In that case, Intergraph claimed that Intel used technology in its Itanium processor that was originally developed and patented by Intergraph. The technology relates to so-called parallel instruction computing and was developed by Intergraph for use in its own Clipper chip, according to Intergraph. That lawsuit is scheduled to go to trial on July 1 in the U.S. District Court in Marshall, Texas.

The companies have agreed on a range for the potential damages that could be doled out in the Texas case. If Intel wins it could end up paying no damages in that case. If the Santa Clara, Calif., chip giant loses, it will pay up to $150 million to Intergraph. If it appealed the loss and then lost again, it would have to pay a further $100 million, the companies said in the statement.