NVIDIA technology to get $1.5B licensing fees from Intel
Keywords:licensing fees? cross-license? legal disputes?
Under the new agreement, Intel will have continued access to NVIDIA's full range of patents. In return, NVIDIA shall receive an aggregate of $1.5 billion and retain use of Intel's patents, consistent with its existing 6-year agreement with Intel. This excludes Intel's proprietary processors, flash memory and certain chipsets for the Intel platform. The existing agreement will expire on March 31, 2011.
Pursuant to U.S. GAAP, a part of the proceeds shall be accounted for and attributed to the settlement of prior legal claims. The amount, which NVIDIA anticipates to be less than $100 million, shall be included in the company's Q4 results.
The balance of the licensing fees will be accounted for on a straight-line basis over the six-year term of the agreement. Accordingly it is anticipated that this would amount annually to approximately $233 million of operating income and an increase in net income of $0.29 per diluted share, on a full year basis.
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