Nvidia, Samsung Settle Over Graphics-Processing Chips

The companies agreed to a license a "small number of patents by each company to the other, but no broad cross-licensing of patents or other compensation," they said in a joint statement Monday.

The agreement came hours before the US International Trade Commission in Washington was scheduled to announce its final decision in a case Samsung had filed against Nvidia. A trade judge had said Nvidia and its customers infringe Samsung patents for ways the chips are made.

The dispute involves graphics chips that are becoming more ubiquitous as smartphones and tablet computers rely on that processing power to stream movies and play complex video games.

Nvidia gets most of its income from selling graphics chips, but hasn't been able to get its processors widely used in phones and tablets. As an alternative, it's trying to get royalties on its chip-related inventions, saying the competitors are using Nvidia ideas without paying for them.

Nvidia, while it's based in Santa Clara, California, has its chips contract manufactured mostly in Taiwan. The graphics processors are then put on circuit boards to become graphics cards by other Asian manufacturers who then either sell them to consumers directly or computer makers.

The case that was to be decided Monday involves a retaliatory case filed by Samsung, which claimed that Nvidia's Shield tablet computers infringed three patents related to how the chips are made. Samsung, based in Suwon, South Korea, lost the first phase of a civil case in Virginia.

The Korean electronics company said the patents in the ITC case cover some of the basic circuit designs so they are smaller, faster and work better. That saves costs for the manufacturers, and enables better video performance.

Nvidia contended that Samsung was just dusting off old technology that even Samsung no longer used. It also argued that any import ban would be inappropriate because the patented inventions cover only minor features.

The case also involves some of Nvidia's customers, including Biostar Microtech International Corp., Jaton Corp., and EliteGroup Computer Systems Co.

The agreement will mean the dismissal of all litigation in district court, the US International Trade Commission and the US Patent and Trademark Office, the companies said.

© 2016 Bloomberg L.P.