In a David v. Goliath story with a surprise ending, Transmeta and Intel have settled their mutually opposing patent infringement lawsuits. Intel will pay Transmeta a total of $250 Million; $150 Million now plus $20 Million a year for the next 5 years.

In addition to all pending lawsuits being settled, Intel will receive non exclusive rights to Transmeta’s entire patent portfolio (press release here). Transmeta gets an influx of cash and a guaranteed income for 5 years which will allow further research & development. Additionally, Transmeta can proceed without the threat of any additional patent lawsuits from Intel.

So who won? While it may be a little early to speculate, Transmeta is clearly better off than it was before the lawsuits were filed. Prior to this settlement, Transmeta’s market value was slightly over $40 Million. They have pretty much guaranteed their future for at least 5 years. In all likelihood, Intel will parlay their “investment” in Transmeta’s patent portfolio into profits which will exceed their cash outlay.

This is a textbook example of a settlement in a business lawsuit which not only stands to benefit both parties, but consumers as well.

One final note. Transmeta has 2 attorneys on it’s in house legal team while Intel’s in house legal team has over 200. I have long believed that in law, smaller is better because it allows much greater flexibility in litigation.

It’s nice to see that David won even if Goliath didn’t lose!