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Intel, Nvidia enter patent cross-licensing deal

Posted: 12 Jan 2011     Print Version  Bookmark and Share

Keywords:cross licensing agreement  patent  litigation 

Intel Corp. and Nvidia Corp. have signed a long-term patent cross licensing agreement where Intel will pay rival Nvidia Corp. Rs.6,879.93 crore ($1.5 billion) over the next five years to resolve outstanding litigation between the two companies.

Under the agreement, Intel (Santa Clara, Calif.) receives a licence to Nvidia's patents, while Nvidia gets a licence to some of Intel's patents. But x86 and certain other products are not covered under the agreement, Intel said.

This excludes Intel's proprietary processors, flash memory and certain chipsets for the Intel platform, Nvidia said. The company has previously said it would no longer make graphics chip sets for Intel x86 processors.

"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 VP and general counsel, in a statement. "It also enables the companies to focus their efforts on innovation and the development of new, innovative products."

Jen-Hsun Huang, Nvidia's president and CEO, said in a conference call that the deal signifies that importance of graphics processing to the PC space and beyond, particularly as more mobile devices with advanced capabilities flood the market. "For all computing platforms, [the GPU] is simply a must have," Huang said.

Paul McWilliams, editor of the technology investment newsletter Next Inning Technology Research, said in a report circulated to subscribers that the deal amounts to "more or less a successful extortion play" by Nvidia. McWilliams said he thought the market will view the deal as favourable for both companies.

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