Intel has agreed to pay $300m to Intergraph to bring to an end the four-year patent infringement dispute filed in Alabama.
A second suit, which alleges that Intel's high-end Itanium server chip infringed on two Intergraph patents related to parallel instruction computing, will proceed as planned on 1 July in Texas.
Under the terms of the settlement, which was reached during a court-imposed mediation session, the companies also signed a cross licence agreement whereby Intergraph will transfer ownership of certain unrelated patents to Intel.
Intel spokesman Chuck Mulloy explained that the two companies agreed in general terms to settle the Alabama case and to take the Texas case to trial.
He said that the company has agreed to pay up to another $150m should a court overseeing the separate suit determine that Intel's Itanium chip infringes on Intergraph patents.
Intel would have to pay another $100m should it decide to appeal such a finding in the second suit and lose.
"Intel is pleased with the settlement, and it is a settlement," said Mulloy. "If you look at the original complaints, Intergraph requested $2.2bn. [It asked for] $350m in state law claims and then asked the judge to triple that amount."
Mulloy maintained that both companies see the agreement as in the best interests of shareholders.
Intel plans to take a charge for half of the settlement amount in its first-quarter earnings, which will be announced on Tuesday.
The Intergraph lawsuit, filed in November 1997, alleged that Intel violated state and antitrust laws, and infringed on Intergraph patents.
The patent claims in the original suit were initially thrown out, although they were later reinstated by an appeals court.
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