Intel and Transmeta Settle Patent Dispute

Intel and Transmeta have settled their year-long patent battle, with Intel paying Transmeta $250 million and getting a license to use Transmeta patents.

Chipmakers Intel and Transmeta have settled their patent dispute, with Intel agreeing to pay Transmeta some $250 million dollars to settle all claims and get a perpetual, non-exclusive license to all Transmeta patents and patent applications for the next ten years. Intel is to pay Transmeta $150 million up front, then $20 million a year for the next five years.

“We are very pleased to have reached this agreement with Intel,” said Transmeta CEO and president Les Crudele, in a statement. “We believe that this arrangement will create value for Transmeta stockholders both by realizing immediate financial value for our intellectual property rights and by supporting our technology development and licensing business going forward.”

A year ago, Transmeta sued Intel claiming the mammoth chipmaker violated 10 Transmeta patents involving processor design and power utilization techniques in microprocessors. All but one of the patents covered processor functions, while the tenth related to changing a processor’s voltage based on its load. In January of this year, Intel countersued Transmeta, claiming the company infringed on seven Intel patents and alleged Transmeta mischaracterized information in its patent applications.

Transmeta was founded in 1995, and tried to compete with Intel with its power-saving Crusoe processor, launched in 2000. The processor failed to catch on with computer makers, and Transmeta shifted its business model towards licensing elements of its processor technology.