The settlement was the latest development in a long-running dispute over technology between the Huntsville-based Intergraph and Intel.
Intergraph sued in 2002 claiming that Dell, Hewlett-Packard Co., and Gateway Inc. violated patents related to systems using Intel chips. Intel earlier had agreed to pay Intergraph $300 million over similar claims, but the deal didn't protect Intel customers.
Intel was brought into the patent case by Dell, which filed a claim against the chip manufacturer after Intergraph sued.
Under the new settlement, Intergraph said it would grant Dell a license to patented technologies and will ask a judge to dismiss Dell from the case. Intel agreed to pay Intergraph $125 million on April 5 to settle claims involving Dell, and it will make four more payments of $25 million over the next year.
Intel spokesman Chuck Mulloy said the agreement marked the end of litigation between Intel and Intergraph. Dell and Intel still disagree over a provision of the settlement but intend to resolve the dispute privately, he said.
Intergraph shares surged $3.28, or 16 percent, to close at $23.67 on the Nasdaq Stock Market, where Intel fell 26 cents, or less than 1 percent, to close at $27.43.
Intergraph will continue with its lawsuit against Hewlett-Packard and Gateway, with trial set for Aug. 2 in Marshall, Texas, where the case was filed.
Unlike Dell, Hewlett-Packard and Gateway did not file claims against Intel, according to Mulloy. "Intel is not in those cases," he said.
Intergraph, which has more than 3,000 employees in 60 countries, specializes in graphics software to make maps, build and operate factories and ships, dispatch emergency service and manage infrastructure.
Intel, based in Santa Clara, Calif., is the world's largest maker of computer chips.