HP pays $141 million to settle Intergraph lawsuit

Hewlett-Packard has agreed to pay $141 million to Intergraph to settle a dispute over HP's alleged infringement of Intergraph's microprocessor patents, HP said on Friday.

The settlement is expected to reduce HP's earnings for the first quarter of its fiscal year 2005 by about $0.03 per share, it said in a statement.

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 relating to Intergraph's products, HP said.

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

The suits relate to technologies developed by Intergraph for its Clipper family of microprocessors, which is now discontinued. Intergraph sued chip maker Intel 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, and Dell. 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. Friday's settlement resolves all outstanding litigation between the companies in both the U.S. and Europe, HP said.

Intergraph also sued Advanced Micro Devices (AMD) 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.

Intergraph, in Huntsville, Alabama, now develops graphics software for analyzing complex data.