BRIEF: Transmeta Shares Soar After Intel Agrees to Pay $250 Million to End Patent Dispute

Oct 25, 12:54 PM

Current Headlines: By Mark Boslet, San Jose Mercury News, Calif.

Oct. 25--Intel agreed to pay $250 million Wednesday to settle patent litigation with rival chip developer Transmeta, throwing a financial lifeline to the smaller company.

The arrangement, announced by the two companies, lifted Transmeta shares 233 percent, or $9.75, to $13.93 in regular trading. It also ended all litigation between the two companies. Both companies said they were happy with the result.

Santa Clara-based Transmeta, founded in 1995, was at one time a promising developer of computer microprocessors that blended both low-power use and high performance. But the company encountered difficulties competing against Intel and Advanced Micro Devices in the market for x86 chips that run most personal computers.

Transmeta filed suit against Intel in October 2006 alleging infringement of 11 of its patents. Intel countersued with infringement claims for seven of its patents.

Wednesday's settlement requires that Intel make an initial payment of $150 million and to pay a $20 million annual license fee for five years.

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