Intel Corp. settled a three-year legal battle with a Chinese company that it had sued for US$7.96 million, the companies said Tuesday.

Intel had alleged that Shenzhen Donjin Communication Technology Co. Ltd. had infringed the copyright on its Intel Dialogic System Release 5.1.1 (SR5.1.1) telephony software, and sought damages from the company in a suit filed in December 2004. The Shenzhen company’s Beijing subsidiary, Beijing Donjin Xinda Technology Ltd., countersued Intel in 2005, alleging that Intel was operating as a monopoly.

The two sides declined to disclose terms of the settlement, but said they would continue to cooperate, although they did not specify how.

Both companies said that further litigation would be detrimental to their business interests. In Intel’s case, it likely did not want its image as a technology company or its significant investment in China — including a new $2.5 billion chip factory in Dalian announced last month — to be tarnished by a protracted court fight over a relatively small figure with a medium-sized Chinese company.

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