Intel will pay Intergraph $225m to settle a long-running patent dispute.
The companies have been entangled in litigation since 2001, when Intergraph sued Intel for alleged infringement of two patents on parallel-computing technology.
A court ruled in Intergraph's favour in late 2002, but an appeals court dropped that judgment in February, sending the case back to the lower court for further examination.
Intel and Intergraph said the settlement resolves their disagreement, and that they will move for dismissal of the case.
The settlement grants Intel a licence for Intergraph's patented Parallel Instruction Computing technology, and includes provisions preventing Intergraph from suing any Intel customers over product combinations involving Intel's microprocessors, chipsets and motherboards, Intel said.
Intergraph said it will continue its lawsuits against Gateway and Hewlett-Packard for alleged infringements stemming from their combinations of Intel hardware with their own products. Intergraph expected trial to commence in August.
Intergraph had also been pursuing a claim against Dell, but an indemnification agreement with Intel, protects Dell from any patent infringement claims arising from Dell's use of Intel's technology.
Integraph chief executive officer Halsey Wise hailed the Intel settlement as a demonstration of the effectiveness of Intergraph's IP licensing and litigation strategy.
Integraph, which had revenue of $527.3m in 2003, will net $203m in IP income in the first quarter of 2004.
Intel will pay Intergraph $125m on 5 April and make four further cash payments of $25m over the next year.
Stacey Cowley writes for IDG News Service