Home News Business Intergraph to receive $225 million in patent settlement

Intergraph to receive $225 million in patent settlement

Intergraph Corporation announced that the Company has resolved its patent infringement claims against Dell Inc. with regard to its Clipper patents. In addition, the settlement resolves Intergraph’s dispute with Intel Corporation regarding the Company’s Parallel Instruction Computing (PIC) patents. Under the settlement agreement, Intel will pay Intergraph $125 million on April 5, 2004. Four subsequent $25 million cash payments will be made by Intel on July 5 and October 5, 2004 as well as January 5 and April 5, 2005. Intergraph estimates its total intellectual property income for the first quarter of 2004, net of all fees and expenses, will be approximately $203 million.

Commenting on the settlement, Intergraph CEO & President Halsey Wise said, “Today’s settlement demonstrates the effectiveness of our intellectual property licensing and litigation actions to date. We believe this settlement and the related licensing agreements are in the best interests of our shareholders and will allow us to focus on our remaining intellectual property enforcement efforts.”

On December 16, 2002, Intergraph filed suit against Dell Inc., Gateway Inc., and Hewlett-Packard Co. (“HP”) (including the former Compaq Computer Corporation) in the U.S. District Court for the Eastern District of Texas. In this action, often referred to as the “OEM case,” Intergraph claims that products from the aforementioned computer vendors infringe upon three Intergraph Clipper system patents. These patents relate to computer system memory management technology.

As part of the settlement, Intergraph will grant Dell a license to the Company’s portfolio of patented technologies and will move to dismiss Dell from the OEM case. Intergraph will continue to pursue the OEM case against HP and Gateway, which is set for trial on August 2, 2004.

The settlement also resolves Intergraph’s litigation with Intel with respect to the PIC patent dispute and the OEM case. Intel became a party to the OEM case on June 21, 2003 when Dell filed a counterclaim against Intel, alleging that Intel was an indispensable party to the OEM case as a result of its April 2002 Settlement Agreement with Intergraph.
As part of the settlement, Intel will receive a license to Intergraph’s patented PIC technology. In addition, the settlement includes a covenant by Intergraph not to sue any Intel customer for products that include the combination of an Intel microprocessor, an Intel chipset and an Intel motherboard.