Friday, January 21, 2005

HEWLETT-PACKARD AND INTERGRAPH SETTLE A WHOPPER: HP has decided to pay $141 million to Intergraph to settle a patent dispute that stretches back two years.

The settlement marks the end of all Intergraph litigation against computer manufacturers related to its Clipper patents, which cover memory management within computer systems. Intergraph filed suit against Dell, Gateway and HP in late 2002 and subsequently reached a settlement with Dell and Gateway last year. Intergraph also settled a related case with Intel last year that resulted in the chipmaker's payment of $225 million to Intergraph.

The HP settlement was announced Friday morning. Both companies will dismiss all pending litigation, and HP will pay Intergraph $141 million during the first quarter. The two companies will also enter into a cross-licensing agreement.

During the past two years, Intergraph has extracted $860 million (!!!) in pretax income from the protection and enforcement of its intellectual property. The Huntsville, Ala.-based company used to make computer workstations based on its own chip and graphics technologies. It now specializes in software and related services in industrial and government applications.

Intergraph will log $11 million in legal expenses in the first quarter.

-- Now, I'm not sure if that $11 million number is the cumulative total that was reached in the first quarter, or if the number was the amount spent in ONE quarter. If the latter is the case, there are some law firms out there laughing all the way to the bank . . .

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