Motorola, Hitachi to Settle Patent Fight

Motorola Inc. and Hitachi Ltd., the giant semiconductor makers that have been embroiled in a bitter patent fight for 18 months, said Monday that they have agreed to settle their dispute out of court over the next several months.

In a joint announcement, they said they have reached “an agreement in principle that will serve as a framework” for a final settlement. The companies also said they would ask the U.S. Court of Appeals in Washington to extend its stay of a lower court order that resolved the dispute in a way that neither desired.

That lower court order forbids Hitachi and Motorola from selling the semiconductors affected by the patent fight. It is considered potentially damaging to Motorola because it covers the company’s top-selling microprocessor, the 68030, the brains of several popular personal computers.

A Hitachi spokesman said his company expects a negotiated settlement in 60 to 90 days.

Both companies declined to comment on terms of the interim agreement. The two former business partners said only that the deal sets the stage for resolution of the patent fight that erupted in January, 1989.

However, analysts said any settlement would probably grant each company access to the other’s portfolio of patented products and processes. In addition, they said, Motorola may agree to pay Hitachi royalty fees for the right to continue production of its current design of the 68030.

Analysts said Motorola is motivated to settle the case rapidly because of the potentially disastrous effect the sales ban on the 68030 would pose for it and its customers, notably Apple Computer. Apple uses the Motorola chip in all but three of its Macintosh personal computers. Analysts said the 68030 microprocessor generates well over $100 million in annual sales.