SAN FRANCISCO (AFX) -- Gateway Inc. will pay Hewlett-Packard Co. $47 million to settle a patent-litigation suit between the two personal-computing industry rivals, the companies said Wednesday.
Of the total, Gateway is to pay $25 million within seven days of a new cross-licensing agreement between the companies. The remaining $22 million will be paid within a year after the start of the pact.
Gateway, without admitting wrongdoing, also said it would enter a seven-year cross-licensing agreement with H-P.
H-P , which initially sued Gateway and its eMachines unit in 2004, claimed infringement of 27 patents in PCs made from 1999 to the present.
As a result of the settlement, Gateway said it would revise its 2005 financial results. It will record a charge of $16.7 million that will reduce its 2005 net income to $32.8 million from $49.5 million.
The licensing fee will be amortized over the life of the seven-year cross-licensing agreement.
Gateway shares fell 8 cents to close at $2.28. H-P rose $1.24, or almost 4%, to end the day at $34.05. This story was supplied by MarketWatch. For further information see www.marketwatch.com.
Of the total, Gateway is to pay $25 million within seven days of a new cross-licensing agreement between the companies. The remaining $22 million will be paid within a year after the start of the pact.
Gateway, without admitting wrongdoing, also said it would enter a seven-year cross-licensing agreement with H-P.
H-P , which initially sued Gateway and its eMachines unit in 2004, claimed infringement of 27 patents in PCs made from 1999 to the present.
As a result of the settlement, Gateway said it would revise its 2005 financial results. It will record a charge of $16.7 million that will reduce its 2005 net income to $32.8 million from $49.5 million.
The licensing fee will be amortized over the life of the seven-year cross-licensing agreement.
Gateway shares fell 8 cents to close at $2.28. H-P rose $1.24, or almost 4%, to end the day at $34.05. This story was supplied by MarketWatch. For further information see www.marketwatch.com.