Intel, Nvidia sign $1.5 billion licensing deal

In the agreement, the two companies will resolve ongoing patent litigation

By , IDG News Service |  Business, Intel, Nvidia

Intel and Nvidia have signed a patent cross-licensing agreement and ended a long-standing legal dispute between the two companies, Intel said Monday.

Under the agreement, Intel will pay Nvidia US$1.5 billion, Intel said in a press release.

"This agreement ... preserves patent peace and provides protections that allow for continued freedom in product design," Doug Melamed, Intel's senior vice president and general counsel, said in a statement. "It also enables the companies to focus their efforts on innovation and the development of new, innovative products."

Under the agreement, both companies get licenses to each other's patents.

Nvidia, which makes chipsets to help CPUs communicate with components like network and storage controllers, had accused Intel of unfair business tactics in the long-standing patent-licensing battle with Intel. Both companies had accused each other of breaching a chip-licensing agreement signed in 2004.

Intel filed a lawsuit against Nvidia in Chancery Court in Delaware in February 2009, asking the judge to rule that Nvidia is not licensed to produce chipsets compatible with Intel processors with integrated memory-controller functionality, such as Intel's Nehalem microprocessors. The long-term licensing agreement announced Monday ends that litigation, Intel said in a statement.

After Intel's February 2009 lawsuit, Nvidia filed a countersuit, saying the past agreements covered the direct media interface bus for Intel's CPUs.

Intel will begin making payments to Nvidia this month, with $300 million due next week. Annual payments will continue through January 2016, according to the agreement.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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