Intel and Digital settle dispute

Intel and Digital have settled their patent dispute, with Digital selling its semiconductor manufacturing plant for $700 million. Both companies will participate in a ten year cross-patent deal. Most importantly, however, is that Intel will take over the production of all Digital microprocessors, though Digital will be responsible for designing future Alphas. Intel will essentially build the Digital designs and sell them back to Digital; they will also support" current and future generations" of the Alpha. Digital, meanwhile, has agreed to support Intel's "Merced" IA-64 microprocessor and will port its Digital UNIX to that platform. Digital will also create Windows NT applications for the IA-64.

"From Intel's standpoint, being able to have DEC commit to the IA-64 product line is very positive, especially to have them port existing UNIX base over to IA architecture," an Intel spokesman said Monday.

The settlement ends a series of legal battles the two companies have had over patents involving Intel and Digital microprocessors. In May, Digital sued Intel, stating that Intel had violated twelve Digital patents while developing the Pentium, Pentium Pro, Pentium II, and Pentium MMX chips. Intel countered with its own lawsuit shortly thereafter.

As part of the settlement, neither company is admitting liability. "Both parties decided that it wasn't going to be terribly productive to spend time in court. Instead we'll spend our time and energy on the business at hand," said an Intel spokesman.

Digital claims the settlement provides a clear growth strategy for the company.

"Our commitment to the leading architectures--Alpha and x86 today, with the addition of IA-64 in the future--is a key differentiator for Digital as it implements its strategy," said Digital CEO Robert Palmer. "With this win-win agreement, we will be able to provide our customers all the benefits of first-class x86 and 64-bit performance-oriented products and software with a clear road-map to the future.

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