Broadcom to pay Intel $60 million

Broadcom said Friday that it will pay rival chipmaker Intel $60 million in cash and submit to technology cross-licensing agreements rather than stand up to pending patent litigation.

The two companies reported that they put an end to all pending litigation around Intel's claim that Broadcom violated five different patents held by the chip giant. The various lawsuits filed in federal courts and with the International Trade Commission (ITC) were dismissed in favor of reciprocal licensing pacts and the $60 million payment to Intel, to be delivered in equal installments during the third and fourth quarters of fiscal 2003.

Intel had previously contended that Broadcom violated five separate patents, one relating to networking, one to chip packaging and three to video compression. Based on those claims, Intel had sought an injunction preventing further infringement, plus unspecified damages and court costs.

Under the new agreements, the two chipmakers and their respective subsidiaries can cross-license each other's technologies for products with patents filed before Aug. 7, 2008. The companies said they do not plan to cross-license patents regarding certain proprietary products, but indicated that those patents were not related to the dismissed lawsuits.

Broadcom said it would record a one-time charge for the $60 million settlement payment in its financial statements for its fiscal quarter ended June 30.

Intel was an early investor in Broadcom, but relations between the two companies frayed as competition between them heated up in a number of communications markets, such as high-speed networking.