HP and Intergraph settle Clipper patent dispute

Palo Alto (CA) - Hewlett-Packard (HP) said it settled all ongoing patent litigation with Intergraph. The companies agreed to a patent cross-license agreement covering Intergraph’s Clipper processor patent.

Under the terms of the agreement, HP will pay Intergraph $141 million. Both HP and Intergraph at the same time withdraw all pending lawsuits without further financial obligations from the dispute. HP expects this settlement to reduce earnings by approximately $0.03 for the first quarter of fiscal year 2005.

The license agreement will grant HP access to Intergraph’s Clipper processor patent. Clipper was used by Intergraph for workstations until 1993 and the company transitioned to Intel chips after that. A lawsuit filed by Intergraph against Intel in 1997, claiming that Intel’s processors infringe on the Clipper patent, became the foundation of similar lawsuits filed later against firms such as AMD, Gateway, Dell and HP.

Intel settled with Intergraph for $300 million, AMD paid $10 million plus an additional two percent of the profits from its processor sales between 2005 and 2008. Gateway reached a similar agreement, settling for $10 million and license fees of $1.25 for certain Gateway and eMachines brand PCs sold in the United States until February 2009. The case against Dell was dismissed after the two firms had reached an agreement outside courtrooms.

HP and Intergraph have been in litigation against each other since 2002, in both US federal court and in the European Union.

According to the terms of the cross-license agreement, HP is granted a license to all Intergraph patents for all fields of use. Intergraph is granted a license to all HP patents in "specific fields covered by Intergraph’s current product categories," HP said. Further financial terms of the agreement have not been released.