Applied Materials and Novellus Systems settle patent dispute

Applied Materials and Novellus Systems announced on September 24, 2004 an agreement that provides for a payment to Novellus of $8 million and waives a claim for unpaid royalties of approximately $3.5 million. The agreement also contains provisions limiting for specified time periods each party's ability to sue each other (and each other's customers and, in certain circumstances, suppliers and distributors) for infringement of their respective patents covering products in certain technology areas. For existing products, the specified time period is five years, and for new products, it is two years. There is no new license of technology in the agreement. The agreement ends all pending lawsuits between the companies without either party admitting any liability. Additional details of the agreement are disclosed in Applied Materials' Form 8-K filed Sept. 24.