Gateway settles with HP over PC patents

Gateway has agreed to pay HP $47m (£27m) to settle a longstanding patent dispute between them.

Gateway has agreed to pay HP $47m (£27m) to settle a longstanding patent dispute between them.

As part of the settlement, the PC makers also agreed a seven-year cross-licensing agreement and dropped all legal claims against each other.

The legal dispute began in March 2004 when HP filed a lawsuit against Gateway, alleging six patent infringements relating to its PCs.

The legal battle escalated when Gateway filed a counter lawsuit alleging HP had violated five of its patents.

Under the settlement, Gateway will pay HP $25m within seven days of a cross-licensing agreement starting, and will follow that with a $22m payment one year later.

As a result of the settlement, Gateway said that its previously reported net profits for 2005 will be reduced by $16.7m to $32.8m.

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