Opti wins in licensing dispute with Nvidia

Opti said it prevailed in an arbitration with Nvidia over its continued use of Opti’s “pre-snoop” technology, and is owed $3.75 million plus interest for Nvidia’s unpaid use of the intellectual property involved for the five quarters from Feb. 1, 2007, through April 30, 2008, according to a filing the company made with the SEC Tuesday.

The two companies had entered into a licensing agreement in 2007 as part of the settlement of a patent infringement claim Opti brought against Nvidia in 2004, according to Tuesday’s filing. The agreement called for Nvidia to make quarterly royalty payments of $750,000 if it continued to use the technology up to a maximum of 12 such payments. Opti says that it had offered an alternative to the quarterly payments so that at any time prior to or on January 31, 2008, Nvidia could have elected to pay Opti a lump sum of $7 million less any quarterly payments already paid.

Opti says it is investigation whether Nvidia owes payments for quarters subsequent to the April 30 quarter.

Up until 1995, Opti manufactured chips for use in desktop computers. Its annual sales declined from $163.7 million in 1995 to no revenue in fiscal year 2006. During the year ended March 31, 2007, Opti recorded revenue of $11 million relating to a license with Nvidia. It recorded no revenue in fiscal 2008.

Opti’s principal expense is now related to its pursuit of patent infringement claims and associated licensing deals. The settlement with Nvidia comes at time when Opti could certainly use the cash. Over a third of the $9.5 million it had in cash and investments as of June 30 was tied up in auction-rate securities, which have been frozen since early this year.


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