The world's largest chipmaker, Intel Corporation, announced on May 14 that it had settled an copyright infringement with a Chinese telecommunication and network equipment manufacturer.

The chipmaker in 2004 charged Shenzhen Donjin Communication Technology Co. of infringing its technology for touch-pad telephone systems. Intel claimed Shenzen Donjin copied parts of the software used in Intel's Dialogic brand of high-end communications equipment, the product of a subsidiary of Intel which was later sold off.

In 2005, Beijing Donjin Xinda Technology Co., a unit of Shenzhen Donjin, countersued, claiming that Intel engaged in monopolistic practices.

Chuck Mulloy, Intel's spokesman, said on Monday that continuing the litigation no longer made strategic sense and both companies have brokered a license over the disputed technology. The companies, however, agreed to keep the terms of the settlement confidential.

In a joint statement, the companies said that pursuing the litigation would not be in their best interests. Beijing Dongjin Xinda Technology Co. also signed the statement.
Industry analysts said they were surprised by the speed of the resolution, but added that Intel is pouring money into China to tap into the booming computer and microprocessor demand. The company likely wanted to eliminate any potential political or business roadblocks.

Intel has committed to investing $4 billion in China by 2010, including a $2.5 billion chip factory in the northeastern city of Dalian for making chip sets which shuttle data from the microprocessor to other system components.

"Everybody wants to keep politics out of the industry as much as possible," said Jim McGregor, director of semiconductors and enabling technologies research at market researcher In-Stat. "Anything that gives the U.S. or Chinese government leverage in the current political climate is something both sides want to avoid."