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Thinkpad (AXcess News) Houston, TX - Gateway, Inc. (NYSE: GTW) said Wednesday that it settleda series ofpatent infringement lawsuits with Hewlett-Packard Co. (NYSE: HPQ) for $47 million. The two computer makers also entered into a seven-year cross-licensing agreement that ends a feud between the two computer rivals stretching back to March 2004.
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Microsoft It all started when HP filedsuit in US District Court in San Diego in Mach, 2004, claiming that five of its patents were being infringed by Gateway.
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Laptop Computers At the time, Gateway had acquired eMachines Inc., which already had a cross-licensing agreement with HP. But HP saw it differently and through a loophole in its eMachines agreement, canceled the license. That brought a countersuit against HP by Gateway, which is where the whole feud began.
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Laptop Computer From there the feud got worse with HP filing a string of lawsuits against Gateway claiming 27 patent infringements, including one with the International Trade Commission. In turn, Gatewayfiled several countersuits that claimed 13 of its patents were being infringed.
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Desktop Computer But today, the two rival computer makers kissed and made up, with Gateway agreeing to pay $25 million to HP within a week of the deal becoming final and the remaining $22 million within a year.
Notebooks Gateway said it will revise financial results for 2005 charging $16.7 million of the settlement against profit. As a result, net income for the year was $32.8 million instead of $49.5 million.
Lenovo Gateway shares fell 8 cents, or 3.4 percent, to close Wednesday at $2.28 and HP shares rose $1.24, or 3.8 percent, to $34.05.
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