HP pays $141M to settle Intergraph lawsuit

The deal is expected to reduce HP's Q1 earnings by 3 cents per share

Hewlett-Packard Co. has agreed to pay $141 million to Intergraph Corp. to settle a dispute over HP's alleged infringement of that company's microprocessor patents, HP announced today.

HP said the settlement is expected to reduce its earnings for the first quarter of its fiscal 2005 by about 3 cents per share.

The companies have entered an agreement that grants HP a license to all of Intergraph's patents and provides Intergraph a license for any HP patents related to Intergraph's products, HP said.

The settlement resolves several outstanding lawsuits between the companies. One of the suits, filed in U.S. District Court for the Eastern District of Texas, had been due to go to trial Feb. 21, according to information on Intergraph's Web site.

The suits involve technologies developed by Intergraph for its Clipper family of microprocessors, which has been discontinued. Intergraph sued chip maker Intel Corp. in 1997, accusing it of using patented Clipper technologies in Intel's own microprocessors.

Intel settled with Intergraph in 2002, but the agreement did not cover server makers that built systems using Intel's chips. Later in 2002, Intergraph filed patent infringement suits against HP, Gateway Inc. and Dell Inc. It later dropped the charges against Dell and settled with Gateway, but the HP lawsuits remained.

HP responded by filing countersuits against Intergraph in the U.S. and, earlier this year, in Germany. Today's settlement resolves all outstanding litigation between the companies in both the U.S. and Europe, HP said.

Intergraph also sued Advanced Micro Devices Inc. over its Clipper patents in January last year. That case was settled three months later, with AMD paying $10 million for a license, plus some subsequent payments.

Huntsville, Ala.-based Intergraph now develops graphics software for analyzing complex data.

Copyright © 2005 IDG Communications, Inc.

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