HP settles Acer patent litigation

An employee walks past a Hewlett-Packard logo during the second day of the International Telecommunication Union (ITU) Telecom World 2006 in Hong Kong December 5, 2006.

NEW YORK/TAIPEI (Reuters) - Top PC maker Hewlett-Packard Co (HPQ.N) said on Sunday it had settled patent litigation with smaller Taiwan rival Acer (2353.TW).

The confidential settlement agreement resolves all claims asserted in three federal court lawsuits and two U.S. International Trade Commission investigations between the parties.

Last October, Acer said it had sued Hewlett-Packard Development Co for patent infringement, alleging violation of seven patents.

HP sued Acer the previous March for patent infringement, aiming to stop the Taiwan firm from selling some products in the United States. That drew a countersuit from Acer in July.

As a result of the settlement agreement, each action concerning Acer and HP will be dismissed, the two companies said.

"The impact from the settlement was not big and we think both Acer and HP will continue to focus on their core businesses," an Acer spokesman said on Monday.

He said he was not aware of any financial terms to the settlement.

Investors largely ignored the settlement on Monday as a Wall Street plunge fuelled strong selling among Taiwan technology shares on fears over slowing demand.

At 12:42 a.m. EDT, Acer shares fell 2.3 percent while the main TAIEX share index .TWII lost 1.8 percent.

Acer said last week its sales would grow by more than 50 percent this year, raising its previous forecast as demand for laptops remains robust despite consumers feeling the pinch from an economic slowdown and rising fuel and food prices.

(Reporting by Christopher Kaufman and Baker Li; editing by Jonathan Hopfner)