HEWLETT-Packard has agreed to pay $US141 million to settle patent disputes with software maker Intergraph, both companies announced.
Hewlett-Packard, which also makes servers and software, said in a statement that it expects the settlement to reduce earnings for the first quarter of fiscal 2005 by about $US3c per share. It will pay Intergraph by January 28.
Hewlett-Packard shares fell $US3c to close at $US19.99 in Friday trading on the New York Stock Exchange. Intergraph shares rose $US46c, or 1.7 per cent, to close at $US28 on the Nasdaq Stock Market.
The companies said in separate statements that they will immediately dismiss, withdraw or terminate all pending lawsuits while reserving the right to reinstate them. They also struck an agreement under which Hewlett-Packard is granted license to all Intergraph patents while Intergraph has license to all HP patents in fields covered by its current products.
Intergraph sued in 2002 claiming that Hewlett-Packard, Dell and Gateway violated patents related to systems using Intel chips. Related settlements were reached last year with Intel, Dell and Gateway.
Hewlett-Packard had been in litigation with Intergraph in both US federal court and in the European Union.
"We're pleased to have come to a resolution and to put it behind us without going into a protracted legal battle and into trial," said Monica Sarkar, an HP spokeswoman.
Intergraph said it would record about $US11 million in legal expenses for the first quarter of 2005 to offset the settlement.
"We believe that the settlement with HP is in the best interest of our shareholders, and we are pleased to have received a license to HP's extensive patent portfolio for our fields of business," said Intergraph CEO and President Halsey Wise.
Intergraph, which has more than 3,000 employees in 60 countries, specializes in graphics software to make maps, build and operate factories and ships, dispatch emergency service and manage infrastructure.
Last year, in addition to receiving a $US225 million payment from Intel to settle the long-running chip patent dispute, Intergraph won a $US25 million settlement payment in a separate case against chip manufacturer Advanced Micro Devices. In 2003, microprocessor maker Texas Instruments agreed to pay Intergraph $US18 million to settle their patent battle.
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