Wrangling with graphics

NVIDIA Corporation and Cirrus Logic have settled their legal wranglings over graphics chips, while Microsoft has signed up with ATI for its next generation XBox design.

NVIDIA and Cirrus Logic have entered into a cross-license agreement and have settled all outstanding litigation between the companies.

In May 2003, Cirrus Logic brought suit against NVIDIA and ATI Technologies in the US District Court for the Western District of Texas, Austin Division, for infringement of a Cirrus patent relating to graphics processor technology. In July 2003, NVIDIA counterclaimed against Cirrus, alleging infringement of patents owned by NVIDIA relating to audio-controller technology.

Under the settlement agreement, all outstanding claims and counterclaims in the lawsuit between Cirrus and NVIDIA will be dismissed. In connection with the settlement, Cirrus Logic will transfer to NVIDIA a portion of its patent portfolio relating to the former graphics products group of its PC products division, a business that Cirrus exited several years ago. Financial terms of the arrangement were not disclosed.

As a result of the settlement, Cirrus said that its total cash at the end of the second quarter of fiscal year 2004 is expected to be approximately $113 million to $118 million, compared to $115.5 million at the end of the company’s first quarter.

Cirrus’ patent infringement claims against ATI remain pending.

Meanwhile, the other graphics chip giant ATI Technologies has entered into a technology development agreement with Microsoft to develop new graphics devices for future Xbox products, effectively supplanting NVIDIA who made the graphics chip for the current version of the system. ATI also supply the graphics processor used in the Nintendo Gamecube, a major Japanese rival to the Xbox.