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HP, Intergraph settle patent dispute

The multimillion-dollar sum is just the latest Intergraph has gathered after alleging abuse of its chip patents.

Hewlett-Packard said Friday it will pay Intergraph $141 million to settle a patent infringement dispute.

The agreement is just the latest in a string of settlements that Intergraph has made with various manufacturers in disputes over its Clipper chip technology.

As part of the deal, HP entered into a cross-licensing agreement that will allow it to use all Intergraph patents. In turn, Intergraph will be able to use all HP patents, but in specific areas based on Intergraph's current product line.

The multimillion-dollar settlement is expected to reduce HP's earnings by 3 cents a share in the first quarter. HP noted that the settlement will resolve all litigation the two parties had against each other in U.S. and European courts.

Intergraph filed suit against HP and other PC giants in 2002. The lawsuit had alleged that the PC companies, which included Dell and Gateway, had violated its patents by incorporating Pentium-family processors--which Intergraph said violated its Clipper patents--into their computers.

Huntsville-Ala.-based Intergraph also filed lawsuits against Intel, Advanced Micro Devices and Texas Instruments, alleging that they too had infringed on the Clipper patents.

Intergraph, which once made hardware but now focuses on services and software, has received roughly $860 million in pretax income from chip-related settlements since 2002. The company noted, however, that it will continue considering potential litigation and licensing strategies as it relates to its patents.

The company said it was pleased to resolve its litigation with HP.

"We believe the settlement with HP is in the best interest of our shareholders, and we are pleased to have received a license to HP's extensive patent portfolio for our fields of business," Halsey Wise, Intergraph chief executive, said in a statement.

Monica Sarkar, an HP spokeswoman, said: "We're pleased to have a resolution to this and be able to put it behind us."

Several companies have settled with Intergraph.

In September 2003, Texas Instruments agreed to pay Intergraph $18 million.

In March, chip giant Intel agreed to pay $225 million. Intel had the added liability of covering for Dell. Under the chip giant's indemnification agreement with Dell, it had to shield the manufacturer from any liability related to using its chips.

In April, AMD agreed to pay a maximum of $25 million. In May, Gateway agreed to pay at least $10 million.