Intel and Nvidia sign license agreement

"This agreement ends the legal dispute between the companies, preserves patent peace and provides protections that allow for continued freedom in product design. It also enables the companies to focus their efforts on innovation and the development of new, innovative products", said Doug Melamed, Intel senior vice president and general counsel. Under the transaction, Intel receives a license to NVIDIA's patents subject to the terms of the agreement. NVIDIA receives a license to Intel's patents subject to the terms of the agreement, including that x86 and certain other products are not licensed to NVIDIA under the agreement. Intel and NVIDIA have also exchanged broad releases for all legal claims, including any claims of breach of their previous license agreement. Intel will pay NVIDIA USD 1.5 billion over the next 5 years. This obligation will be recognized as a liability totaling approximately USD 1.4 billion, on a discounted basis. Intel recognized an expense of USD 100 million in the fourth-quarter of 2010, classified as "marketing, general and administrative." The remaining amount, approximately USD 1.3 billion, will be recognized as an intangible asset in the first quarter of 2011 and will be amortized into cost of sales over future periods.