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Judge says Itanium chip infringes patents

A US district court has ruled that technology used by Intel in its 64-bit Itanium processors infringes on technology patents held by Intergraph, a ruling that could require Intel to hand over at least $150m (£96m) in liquidated damages to the smaller company.

Judge John Ward of the US District Court, Eastern District of Texas, ruled that Intel's Itanium products infringe on patented Intergraph technologies related to so-called parallel instruction computing (PIC). The judge said Intergraph's patents are "valid and enforceable" and that Intel's products "literally infringe" on parts of those patents, according to Intergraph.

Intel will ask the judge to reconsider the terms of his decision within the next 10 days, according to Chuck Mulloy, an Intel spokesman. "We plan to file a motion for reconsideration and, if the judge denies that, we plan to appeal against the ruling," Mulloy said.

Intergraph and Intel settled an earlier patent infringement case in April 2002. Under the terms of that settlement, Intel paid Intergraph $300m (£192m) and licensed certain Intergraph technology patents. At the time, the companies also agreed to set liquidated damages for the PIC case, according to Intergraph's statement.

Under the terms of that agreement, the Texas court's finding requires Intel to pay Intergraph $150m in liquidated damages for the PIC infringements, according to Intergraph. Intel must then either appeal against the District Court's decision, pay an additional $100m for a licence to Intergraph's PIC patents, or redesign its Itanium chips in a way that doesn't infringe on Intergraph's patents, Intergraph said.

If Intel chooses to appeal and then loses, terms of the April settlement will require it to pay the smaller vendor an additional $100m, according to Intergraph.

"We would like to bring this to a conclusion," said Jeannie Robison, an Intergraph spokeswoman. "We have been in litigation for several years."

Intel is looking for the Itanium processor to boost its place in the high-end server market currently dominated by IBM, Hewlett-Packard and Sun Microsystems. The company released the second version of its Itanium chip earlier this year.

Intergraph provides software and services for a variety of vertical markets, including education, energy and public safety. The company was formally a maker of computer chips.

The Texas court ruling validates Intergraph's patents and paves the way for it to pursue licensing fees from other vendors in the consumer electronics and computer industries, Intergraph chairman and chief executive Jim Taylor said. Intergraph noted that Fujitsu had recently licensed the PIC technology for use in consumer electronics and embedded applications.

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