PALO ALTO, CA, Jan. 21, 2005 - Hewlett-Packard Co. has agreed to pay $141 million to settle patent disputes with software maker Intergraph Corp.

Hewlett-Packard said in a statement that it expects the settlement to reduce earnings for the first quarter of fiscal 2005 by about 3 cents per share. It will pay Huntsville, Ala.-based Intergraph by Jan. 28.

The companies said in separate statements that they will immediately dismiss, withdraw or terminate all pending lawsuits while reserving the right to reinstate them. They also struck an agreement under which Hewlett-Packard is granted license to all Intergraph patents while Intergraph has license to all HP patents in fields covered by its current products.

Intergraph sued in 2002 claiming that Hewlett-Packard, Dell Inc. and Gateway Inc. violated patents related to systems using Intel Corp. chips. Related settlements were reached last year with Intel, Dell and Gateway.

Hewlett-Packard had been in litigation with Intergraph in both U.S. federal court and in the European Union. Intergraph said it would record about $11 million in legal expenses for the first quarter of 2005 to offset the settlement.

"We believe that the settlement with HP is in the best interest of our shareholders, and we are pleased to have received a license to HP's extensive patent portfolio for our fields of business," said Intergraph CEO and President Halsey Wise.