Intel And AMD End Legal Tussle

Intel and AMD have settled their long running legal dispute, including the antitrust and cross-license issues, in a deal which will see Intel hand over $1.25 billion (£756 million) to its rival and agree to a set of business practices.

The two companies announced the settlement on Thursday, with executives from both companies scheduled to speak about the settlement later in the day.

“While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development,” the two vendors said in a joint statement.

Included in the agreement is a new five-year cross-license agreement between Intel and AMD, and the two chip makers will relinquish claims that the other had breached the previous deal.

In return for the cross-patent deal and the $1.25 billion payment, AMD will drop all pending legal action against Intel, including a lawsuit filed in US District Court in Delaware and two other cases in Japan. In addition, AMD will withdraw all of its regulatory complaints around the world.

The deal comes two days after Barclays Capital analyst Tim Luke suggested that a settlement in the lawsuit could be near, saying that an agreement would benefit both companies.

It would let both sides save on legal bills that already have cost the companies millions of dollars. That’s particularly important to AMD, which is working to get its financial picture back in order.

For Intel, the deal means getting one legal headache out of the way. But the company still faces other legal hurdles.

The European Commission in May fined the company $1.45 billion (£876 million) for anticompetitive practices. In addition, the N.Y. Attorney General’s Office last week filed a lawsuit against Intel that echoed the European complaints, essentially suggesting that Intel used a combination of bribery and coercion to ensure that OEMs, including Dell, Hewlett-Packard and IBM, limited their use of AMD products.

Analysts also believe that the Federal Trade Commission also could file a complaint against Intel, possibly by the end of the year.