Intel to pay Nvidia $1.5 billion to end patent dispute

Intel, the world's largest chipmaker has ended a one-year patent dispute with graphics card developer Nvidia by agreeing to pay $1.5 billion over the next five years.

Under the deal announced on Tuesday, Intel has entered into a new comprehensive long-term patent cross license agreement with Nvidia, where Intel will pay Nvidia $1.5 billion in six installments over a five-year period starting from 18 January 2011 and the final payment will be made on 15 January 2016.

"This agreement ends the legal dispute between the companies, preserves patent peace and provides protections that allow for continued freedom in product design," Intel general counsel Doug Melamed said in a statement. "It also enables the companies to focus their efforts on innovation and the development of new, innovative products."

In the six-year patent cross-license agreement, the two companies will provide access to each other's entire range of patents, barring Intel's x86 technology and certain other products.

The dispute had centred around the patents of each company that were being used by the other.

Intel had fired the first salvo in February 2009 by filing a suit against Nvidia demanding licence fees for the chipsets to be made by Nvidia for future Intel microprocessors.