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Marvell Technology Group Ltd. has agreed to pay Carnegie Mellon University $750 million to settle a patent dispute.

Last August, Marvell convinced a federal appeals court to reverse most of a $1.54 billion damage award to Carnegie Mellon, but the court affirmed that Marvell infringed the two patents at issue, which cover technology related to computer disk drives.

The settlement announced Wednesday resolves all pending appeals. Marvell added that its cash and short-term investments exceeded $2.3 billion. Marvell had previously recorded about $388 million for litigation reserves in fiscal 2016 related to Carnegie Mellon.

Marvell was found guilty of infringing the patents in December 2012 by a federal jury, which set $1.17 billion in damages. A federal judge increased the award to $1.54 billion, reflecting an extension of the period covered by the award and a finding that Marvell willfully infringed the patents.

The verdict became a cloud hanging over the company, which had been fighting hard to have it reversed. It also raised opposition from high-tech companies such as Microsoft Corp., Google Inc., Hewlett-Packard Co., Dell Inc. and Broadcom Corp., which filed court papers attacking the size of the damage award.

A key issue in the case is whether royalty payments ordered by a U.S. court should cover sales of products sold outside the country, as the jury ruled. Marvell and its supporters argued that the royalties should only apply to products sold in the U.S.

The appeals court struck down the finding of willful infringement, while affirming the royalty fee set by the jury of 50 cents for each chip Marvell sold. It agreed with the companies, however, that the royalties should only cover Marvell chips that were imported or sold into the U.S.

Based on the jury's finding of the number of chips imported, the court set the damage award at $278.4 million. But it concluded a new trial was needed to settle the correct sale location of some chips.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

February 17, 2016 17:15 ET (22:15 GMT)

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