HP Agrees to Settle Disputes Over Patents
Hewlett-Packard Co. said Friday that it had agreed to pay $141 million to settle patent disputes with software maker Intergraph Corp.
Hewlett-Packard said it expected the settlement to reduce earnings for the first quarter of fiscal 2005 by about 3 cents a share. It will pay Huntsville, Ala.-based Intergraph by Friday.
Hewlett-Packard shares fell 3 cents to $19.99 on the New York Stock Exchange. Intergraph shares rose 46 cents to $28 on Nasdaq.
Both companies said they would immediately dismiss, withdraw or terminate all pending lawsuits while reserving the right to reinstate them.
They also struck an agreement under which Hewlett-Packard is granted license to all Intergraph patents while Intergraph has license to all HP patents in fields covered by its current products.
Intergraph sued in 2002 claiming that Hewlett-Packard, Dell Inc. and Gateway Inc. violated patents related to systems using Intel Corp. chips. Related settlements were reached last year with Intel, Dell and Gateway.
Palo Alto-based Hewlett-Packard had been in litigation with Intergraph in U.S. federal court and in the European Union.
“We’re pleased to have come to a resolution and to put it behind us without going into a protracted legal battle and into trial,” said Monica Sarkar, an HP spokeswoman.
Intergraph said it would record about $11 million in legal expenses for the first quarter to offset the settlement.
“We believe that the settlement with HP is in the best interest of our shareholders, and we are pleased to have received a license to HP’s extensive patent portfolio for our fields of business,” said Halsey Wise, chief executive of Intergraph.
Intergraph, which has more than 3,000 employees in 60 countries, specializes in graphics software to make maps, build and operate factories and ships, dispatch emergency service and manage infrastructure.
Last year, in addition to receiving a $225-million payment from Intel to settle the long-running chip patent dispute, Intergraph won a $25-million settlement payment in a separate case against chip manufacturer Advanced Micro Devices Inc. In 2003, microprocessor maker Texas Instruments Inc. agreed to pay Intergraph $18 million to settle their patent battle.
