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Intel to pay $1.5 billion in licensing fees to Nvidia

The agreement ends a two-year legal battle between the chip makers.

January 11, 2011|By Abby Sewell, Los Angeles Times

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

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

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 current licensing agreement between the companies ends March 31.

Nvidia shares closed up nearly 4% and jumped 4.2% to $21.50 in after-hours trading. Intel stock closed up 3 cents at $20.69 and remained mostly unchanged in after-hours trading.

abby.sewell@latimes.com

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