Intel is to pay Intergraph $300m to settle longstanding Pentium patent infringement claims filed in Alabama by Intergraph.

But the adversaries are still slugging it out in Texas, where a patent suit in U.S. Federal District Court in Marshall will "proceed as planned".

"The liquidated damages range from zero if Intel prevails, and $150 million if Intergraph prevails and up to $250 million if Intergraph prevails on appeal."

Under the Alabama accord, the companies have signed a cross license agreement, while Intergraph will "transfer ownership of certain unrelated patents".

No other details have been revealed. Intergraph last year won a patent infringement case against Intel. It had developed technology when designing the C5 Clipper chip in the early 90s, which was used by Intel for the design of the Pentium chip.

The pair were ordered by the court to enter arbitration - and they started talking last week. Intergraph and its shareholders must be very pleased, especially if there is a continuing royalty stream coming its way from Intel. As all "other terms of the settlement are confidential" we can but speculate. ®