Intel has agreed to stump up $250m to Transmeta to settle the patent dispute case between the firms without battling through the courts. Intel will pay its rival $150m in a lump sum, plus an annual license fee of $20m for the next five years.

Transmeta sued Intel back in October 2006, alleging that the chip giant infringed ten of its patents covering power management and computer architecture in its Pentium III, 4, M, Core and Core 2 products. Intel hit back, claiming that Transmeta's technology stepped over the line on many of its patents too.

The stage was set for a lengthy legal battle, and after a year of wrangling, lawyers have come to terms.

The agreement between the two firms grants Intel non-exclusive access to the technologies, in addition to "any patent rights later acquired by Transmeta, now existing or as may be filed during the next ten years".

For its part, Intel promises not to sue Transmeta for developing and licensing its own technologies based on its patents.

Transmeta issued a statement from its CEO, Les Crudele: "We are very pleased to have reached this agreement with Intel. We believe that this arrangement will create value for Transmeta stockholders both by realising immediate financial value for our intellectual property rights and by supporting our technology development and licensing business going forward."

At the time of writing, no statement had been issued by Intel. ®