Intel to Settle Patent Lawsuit

Computer chip giant Intel Corp. agreed to pay $300 million to settle a long-running lawsuit in Alabama over Intergraph Corp.’s patented Clipper technology, Intergraph said Monday.

Intergraph said it reached an agreement with Intel for the Alabama case after mediation. The lawsuit pending in federal court in Birmingham, Ala., will be dismissed, and the firms have signed a cross-license agreement.

In addition, Intergraph agreed to sell certain unrelated patents to Intel.

The news sent Intergraph shares down $1.88 to $15.02 on Nasdaq. Intel shares fell 28 cents to $28.11, also on Nasdaq.

In 1997, Intergraph, a Huntsville, Ala., maker of workstation computers, sued Intel, alleging infringement of its Clipper patents. In 2001, Intergraph filed another suit in federal court in Marshall, Texas, alleging Intel infringed two patents related to parallel instruction computing.

Intergraph has claimed Intel uses the Clipper technology in its Pentium family of microprocessors that power personal computers, and sought royalties from the microchip maker.

The companies’ litigation in Texas will go to trial this summer.

Intel also said Monday that it will post about half of its $300-million payment to Intergraph as a charge to first-quarter earnings.

A Thomson Financial/First Call survey of 23 analysts yielded a mean earnings estimate of 15 cents a share for the first quarter, compared with 16 cents Intel earned a year ago.

The Santa Clara, Calif., chip maker plans to report first-quarter earnings today.