Local firm also gets cut of profits over 3 years in patent case
04/12/04
Huntsville-based Intergraph Corp. continued its multimillion-dollar lawsuit settlement roll today, settling a patent dispute with computer-chip maker Advanced Micro Devices Inc. for $10 million plus a share of AMD profits.
Under terms of the settlement announced this morning, AMD will pay Intergraph $10 million by May 7, and then pay Intergraph 2 percent of its pretax operating profits over the next three years, with a cap of $5 million annually.
Including today's announcement, Intergraph's patent defense efforts have generated at least $713 million for the software and services company in the last two years.
Since 2002, Intel Corp. has agreed to pay Intergraph a total of $675 million to settle two patent disputes and cover a license for Dell Inc. to use Intergraph technology.
Intergraph also received an $18 million payment from Texas Instruments Inc. last year for use of Intergraph's parallel instruction computing patents. IBM Corp. agreed early last year to pay Intergraph $10 million and extend use of IBM patents to Intergraph over 10 years to settle ongoing patent disputes between the companies.
The settlement today follows AMD's January filing of a court motion in California seeking to have the court rule that Intergraph's patents were invalid or not infringed by AMD products. AMD was not asking for any money from Intergraph in that court filing.
Intergraph chief executive Halsey Wise said the company was pleased with the agreement and said the deal was in the best interests of Intergraph shareholders.
In its annual report, Intergraph reported that AMD filed the January court motion after receiving a subpoena from Intergraph related to its lawsuits against large computer makers Dell, Hewlett-Packard Co. and Gateway Inc.
Intergraph reported that it had discussions with AMD about licensing, but "with no success."
The technology at the heart of the cases involves Intergraph's Clipper patents. The patents were the focus of Intergraph's four-year court fight with Intel over Intel's Pentium family of processors.
A federal appeals court found in 2002 that the Pentium used Intergraph-owned technology and Intel settled the case for $300 million.
That settlement led Intergraph to file a lawsuit in December 2002 against computer-makers Dell, Hewlett-Packard Co. and Gateway Inc. The lawsuit alleges the companies were using Intergraph technology without paying for it. The case is set for trial in August.
On March 30, Intel and Intergraph settled a separate patent dispute. As part of that agreement, Intel bought a license for Dell, essentially freeing Dell from the lawsuit that continues against H-P and Gateway. In the settlement covering a separate patent and Dell's license, Intel agreed to pay Intergraph $225 million.
H-P has filed a counterclaim against Intergraph in U.S. District Court in San Francisco.
Intergraph stock, traded on the Nasdaq under the symbol INGR, was up 25 cents to $24.65 in late morning trading.