A nine-year legal battle ended June 4, when Cornell and Hewlett-Packard Corp. (HP) agreed to settle their legal differences. With the signing of a confidential settlement agreement, both parties withdrew appeals that were pending in the case.

The dispute centered on the legal responsibility to pay reasonable royalties on patented technology. Cornell sued HP in 2001 for infringing the university's patent on electrical and computer engineering professor emeritus H.C. Torng's revolutionary invention that enables the central processing unit (CPU) -- the technology at the heart of the computer -- to work significantly faster. The patent is the seventh-most cited computer hardware patent in the United States.

"We are pleased that Cornell's case against HP is concluded and are very satisfied with the outcome," said President David Skorton. "The university looks forward to reinvigorating research collaborations with HP in several scientific and business areas in which both Cornell and HP excel, and in which the collaborations would benefit both parties as well as our students."

According to University Counsel James Mingle, "This case has had a powerful impact on university licensing efforts, as other companies also recognize the university's resolve to protect valuable intellectual property produced by its faculty.

"If you knit the Cornell case together with several other successful suits marshaled by other major research universities -- such as the University of California's patent cases against Microsoft and Monsanto, the University of Michigan's suit against Bristol-Myers-Squibb and the University of Wisconsin's suit against Intel -- the impact on tech transfer is nationwide," said Mingle. "These cases, all filed as last resorts after licensing efforts failed, tend to bring balance to the bargaining table between universities that produce intellectual property and companies that want to use it."

Cornell was represented by Edward Poplawski and Bryan Anderson of the law firm Sidley Austin LLP and by a Cornell team headed by Mingle that includes Deputy University Counsel Nelson Roth and Associate University Counsel Valerie Cross Dorn.

Timeline

1982: H.C. Torng, a Cornell professor of electrical and computer engineering, invents a device that enables microprocessors to function significantly faster by executing multiple instructions simultaneously, rather than one at a time. It determines which instructions are not dependent on the results of others and allows the processor to execute those out of order, enabling more instructions to be executed during the same computer clock cycle.

1989: Cornell secures a patent on the invention; Torng to receive a share of royalties on licenses issued.

1999: Torng retires from Cornell; he and his wife move to California in 2000.

2001: After licensing efforts fail, Cornell sues HP in the U.S. District Court in Syracuse, alleging the company is infringing the patent. HP claims it developed its own technology to achieve the same purpose.

2004: In a significant pre-trial ruling, the court interprets the patent claims in Cornell's favor. The parties engage in extensive discovery of the underlying facts and expert opinions.

2006: The patent expires.

2007: Pre-trial discovery closes. The court denies HP's motions for pretrial dismissal on grounds that included challenges to the patent's validity and the timeliness of Cornell's lawsuit. The case is scheduled for a jury trial in 2008.

2008: A jury finds that Cornell's patent was valid and that HP infringed it. The jury awards Cornell $184 million in damages, the royalty amount it calculates HP would have paid Cornell from the sale of servers and workstations that used the technology.

2009: The trial judge reduces Cornell's award to $71.3 million. He ruled that HP made less money from infringing on the patent than the university had claimed because HP obtained an implied license through another company. He also ruled that the jury had incorrectly calculated the royalty base. Both HP and Cornell appeal the rulings.

2010: HP withdraws its appeal challenging the trial court's judgment that the company infringed Cornell's patent. Cornell drops its appeal that the trial court erred in reducing the damages awarded by the jury. Cornell and HP settle the dispute out of court.