Intel and Nvidia drop outstanding legal disputes signed and renewed a six-year cross-licensing agreement

Intel (INTC) and Nvidia Corp. (NVDA) have reportedly signed and renewed a six-year cross-licensing agreement for accessing each-others silicon related patents. In mid-February 2009, Intel dragged Nvidia to court over a four-year-old cross-licensing agreement. Intel allegedly told Nvidia to cease claiming rights for producing chips to work with Intel’s next-generation processors. Nvidia tried to crush Intel with its Nvidia ION solution, while Intel kept promising the Larrabee GPU. Neither of the projects made it big and we wonder why so much money and time was invested on them.

Intel now has the right to use Nvidia technology at a time when graphics processing is increasingly important.

“This agreement ends the legal dispute between the companies,” said Doug Melamed, Intel senior vice president and counsel. “It also enables the companies to focus on innovation and the development of new products.”

Intel is the dominant market player supplying micro-processors for 80% of the world’s personal computers.

However, the sector is changing rapidly as computing becomes more mobile.

Hand held computers, smartphones and tablet computers require high-definition video.

The amount that Intel has agreed to pay in Monday’s settlement reflects the importance of Nvidia’s graphics technology to the chip-making giant, which is keen to take a slice of the mobile computing market.

“This agreement signals a new era for Nvidia,” said Jen-Hsun Huang, Nvidia’s president and chief executive.