Intel, Nvidia reach $1.5-billion settlement in licensing suit

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Intel Corp. has agreed to pay $1.5 billion in licensing fees to Nvidia, ending a two-year legal battle between the two companies.

The companies announced Monday that they have signed a new six-year cross-licensing agreement, which gives them rights to each other’s patents, subject to certain terms.

Intel sued Nvidia, a maker of graphics chips, in February 2009 alleging that the license agreement the companies had signed did not extend to Intel’s future generation of processors; Nvidia countersued.

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

Intel will pay the licensing fees in annual installments over five years. The existing licensing agreement between the companies ends March 31.

Nvidia shares closed up 3.83% at $20.63 and jumped another 4.2% to $21.50 in after-hours trading.

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-- Abby Sewell