Intel and Nvidia Settle Licensing Lawsuit With $1.5 Billion Payout to Nvidia

Intel and Nvidia have settled over a patents and licensing dispute from 2009.

As part of the settlement, Intel will gain access to Nvidia’s patent library while Intel will pay $1.5 billion to the graphic chip company.

The payment is due to an imbalance in patent properties shared between the companies, with Intel gaining access to all of Nvidia’s GPU patents and Nvidia only seeing certain Intel patents. The $1.5 billion payout to Nvidia, which will be dished out in five instalments starting January 18th 2011, is being used to compensate the company.

This agreement also sees the end to any unresolved lawsuits between the two companies.

The case was a result of conflicts stemming from early in 2009 where both companies sued each other over a cross licence disagreement. Essentially, Intel contested that Nvidia only had permission to build Intel-compatible GPUs up until the Core 2 Duo generation of Intel chipsets. The latest i3, i5 and i7 chips, Intel contended, were not included in the agreement, effectively blocking Nvidia from developing for them.

GameSpot uses the example of the recent Apple Macbook Air which retained the older Core 2 Duo processor because of the discrete Nvidia GPU chipset built-in.

However, Nvidia is still barred from using any of Intel’s x86 processor technology. Nvidia have maintained that they have no interest in using Intel’s technology, however, instead opting to go with the newer ARM processors – a chipset that competes with Intel.

Nvidia CEO Jen-Hsun Huan said that “we’ve already said many times that we have no intention to build chipsets for Intel processors,” and that “it’s a foregone conclusion that ARM is the most important [chip] architecture.”

Intel senior vice president Doug Melamed said: “This agreement ends the legal dispute between the companies. It also enables the companies to focus on innovation and the development of new products.”