Intel settles with WiLAN over patent litigation

TORONTO Fri Jan 14, 2011 3:39pm EST

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TORONTO (Reuters) - Intel Corp has reached a settlement with WiLAN Inc over lawsuits alleging the chipmaker infringed on a string of wireless and Internet patents, sending WiLAN's shares surging.

WiLAN said the deal, announced Friday, would not lessen its resolve to go after Intel's co-defendants, including Apple Inc, Dell Inc and Hewlett-Packard Co.

Intel will make a series of payments on a multi-year license of WiLAN's entire patent portfolio. Neither Intel nor Ottawa-based WiLAN, which derives most of its business from patent protection, disclosed the value of the settlement.

Alexander Poltorak, chief executive of General Patent Corp, a patent advisory firm, said the amount paid was likely substantial. He said it was likely other defendants would now settle as well, though PC makers using Intel components would not need to license the technology a second time.

"When the biggest defendant settles, it starts a domino effect and everyone else follows," Poltorak said.

Intel's legal counsel had taken a lead role in a number of related cases covering WiLAN's intellectual property in laptops, routers and handsets and covers WiFi, CDMA, Bluetooth and DSL technologies, WiLAN spokesman Tyler Burns said.

The deal, which is expected to be finalized in a few weeks, will end litigation between WiLAN and Intel pending in courts in eastern Texas and northern California.

The trial had been due to resume in early February after being delayed in December. WiLAN had welcomed the delay to get extra time to reach out-of-court settlements.

The Canadian company first served notice in October 2007 claiming infringement of its wireless patents. It later added a claim related to Bluetooth, which enables hands-free phone calling and wireless photo downloading.

In November, WiLAN set its sights on cable companies Comcast Corp, Time Warner Cable Inc and Charter Communications Inc claiming their cable systems and modems infringe its patents.

Earlier Intel agreed to pay graphic chip designer Nvidia Corp $1.5 billion this week to license its technology.

WiLAN's Toronto-listed shares jumped more than 10 percent after the announcement, to trade at C$6.90. Intel, which released strong results after the bell on Thursday, was down 0.8 percent at $21.11 on Nasdaq.

(Reporting by Alastair Sharp; editing by Frank McGurty)

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