The settlement ends the first of two lawsuits that Intergraph filed against Intel for patent infringement and caps the maximum damages if Intel loses a second suit and appeal at £175m, according to statements released by both Intel and Intergraph.
Under the terms of the agreement, if Intel loses the second suit, which is scheduled to be heard in June, the most it would pay Intergraph is £105m. If Intel appeals against that award and loses the appeal, it is liable only for a second payment of an additional £70m.
"We think this is in the best interest of Intel and Intergraph's shareholders," an Intel spokesman said.
Intergraph said the settlement grew out of a mediation attempt by the court. Intergraph originally filed suit against Intel in 1997, accusing the chip maker of infringing on Intergraph's Clipper microprocessors when it created the Pentium family.
Intergraph filed a second suit last year and alleged that Intel infringed on Intergraph's patents on its Parallel Instruction Computing (PIC) technology when Intel unveiled its Itanium processors. A US District Court judge in Texas ordered the two to mediate their dispute. Instead, the pair managed to settle the earlier Alabama case.
Intel said the settlement was not an admission of guilt.