AMD announced today it has settled patent claims with Intergraph Corporation relating to AMD’s microprocessors. Under terms of the agreement, AMD will receive a license under Intergraph’s “Clipper” microprocessor patents and the patent lawsuit in the United States District Court for the Northern District of California will be dismissed.

The agreement provides pass-through rights to AMD customers for systems that include an AMD microprocessor. Additionally, Intergraph will drop all claims of infringement against systems utilizing AMD processors including in its pending lawsuits.

Clipper processors were used by Intergraph in its workstations in the late eighties and early nineties. Intergraph accused Intel and AMD of infringing its patents by incorporating cache memory management similar to Clipper’s into the chip designers’ processors, such as Intel Pentium.

AMD will pay Intergraph $10 million, plus 2% of profits from its microprocessor sales for three years (2005-2007). These payments are capped at $5 million per year and the total of all payments under the agreement are capped at $25 million.

Intel also paid several hundreds of millions to Intergraph