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Gateway settles patent suit with Intergraph

Intergraph has settled its Clipper patent lawsuit with Gateway.

PCs sold under the Gateway and eMachines brands now have a licence for Intergraph's Clipper memory management technology, Intergraph said.

The licence cost Gateway a one-time $10m (£5.7m) fee spread out over the rest of this year as well as future royalty payments of $1.25 on select PCs sold by Gateway until February 2009.

Intergraph, now a software company, used to manufacture graphics workstations and processors.

The company has sued a number of PC and processor companies alleging that their chips infringe on a patent Intergraph holds for the cache memory design of its Clipper processors sold in the 1980s.

Intel and AMD have settled lawsuits with Intergraph and taken licences for the Clipper technology. Intel's settlement contained a provision under which Intergraph resolved claims against Dell and Texas Instruments has also settled its legal differences with Intergraph. Legal matters are still pending against Hewlett-Packard.

The licences received by Intel and AMD also pertain to their customers, an Intergraph spokesman said, so PC suppliers using Intel processors and chipsets, or AMD processors, will be protected against future Clipper-related lawsuits.

Gateway announced earlier this week that it expanded a reserve account for a patent-related matter in the first quarter.

This was in preparation for the Intergraph settlement, a Gateway spokesman confirmed. The expanded account widened Gateway's first-quarter net loss by $6m.

Tom Krazit writes for IDG News Service


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