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Intel, Broadcom Settle Patent Suit

Rival chipmakers Intel and Broadcom Friday said they have settled their three-year old patent dispute out of court.

The two chipmakers and some of their subsidiaries have been engaged in several patent lawsuits in the federal courts as well as proceedings in the International Trade Commission.

Under the settlement agreement, the two sides have dismissed "with prejudice" all outstanding claims and counterclaims. Broadcom also said it will pay Intel $60 million in cash in two equal installments in the third and fourth fiscal quarters of 2003.

Additionally, Broadcom and Intel entered into a separate comprehensive cross-license agreement covering patents owned or controlled by either party or its subsidiaries, and having a first effective filing date, at any time through August 7, 2008.

Under the agreement, products of each party and its subsidiaries are licensed under the patents of the other for the respective lives of the patents.

"All existing products of each party are licensed by the other. Certain proprietary products of each party are not licensed to the other, but neither company believes that the license exceptions are material to its business as currently conducted or planned. No fees or royalties are payable by either party with respect to its business as currently conducted or planned," the companies expressed in a prepared statement.

Santa Clara, Calif.-based Intel first sued Irvine, Calif.-based Broadcom in August 2000 claiming it had infringed on a handful of patents which relate to so called "smart" networking products, semiconductor chip packages, and digital video encoding and decoding techniques. A jury cleared Broadcom of the charges in 2001. Intel filed an appeal and was waiting on a new trial as well as accusations of infringement on three other patents. That case had been pending but is now nullified now that a settlement has been announced.

The companies each expressed satisfaction with the litigation settlement as well as the patent cross-license agreement.