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IBM, Magma extended cross-licensing agreement, will conduct joint R&D

Posted: 04 Jul 2005 ?? ?Print Version ?Bookmark and Share

Keywords:physical synthesis? routing? eda?

Magma Design Automation Inc. and IBM Corp. have forged a new licensing and joint R&D agreement to develop technology for physical synthesis and routing, according to an 8-K form that Magma filed with the U.S. Securities and Exchange Commission (SEC) Thursday (June 30).

As part of the agreement, the companies said, IBM is entitled to purchase up to 500,000 shares of Magma common stock at an exercise price of $4.73 per share - well below Magma's Thursday closing price of $8.36 per share.

Magma said the warrant was issued in partial consideration for a technology license agreement, executed Thursday, which grants Magma a license to copyrighted IBM EDA technology and intellectual property.

A Magma spokesperson said Thursday that the companies would work together to develop "physical implementation" technology originally created by IBM. The spokesperson said Magma is not providing more specific information about the technology at this time.

Magma and IBM have maintained a retroactive cross-licensing agreement on all EDA patents since March 2004. The original agreement between the two companies covered EDA technology developed through 2007. Thursday's agreement extended this period until 2010.

The two IBM licenses cover IBM's "patents and significant technology with respect to the development of EDA tools and products that perform physical implementation," according to the Thursday SEC filing.

Magma and others have maintained that the arrangement with IBM could be relevant to the highly-publicized legal battle between Magma and Synopsys Inc. Lukas van Ginneken, the former Magma chief scientist who allegedly used technology he developed at Synopsys as the basis for Magma products, worked for IBM prior to Synopsys. Magma has said it believes that a significant portion of fixed timing technology central to that dispute was originally developed at IBM and that the cross-licensing agreement would protect Magma even if courts decided that the disputed patents belong to Synopsys.

The Magma spokesperson said the Thursday agreement is completely unrelated to the technology involved in the Synopsys dispute.

The warrant for IBM to purchase Magma common stock is exercisable immediately. It expires June 30, 2010, or immediately prior to a change of control of Magma.

- Dylan McGrath

EE Times

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