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The two companies said in a joint statement that given their developing strategies and business operations, pursuing the lawsuit was not in the best commercial interests of each company.

Intel Corp. sued Shenzhen Dongjin, a private Chinese company, in 2004 for alleged copyright infringements relating to its Inter Dialogic System Release 5.1.1 software (SR5.1.1) and demanded compensation of 7.9 million US dollars.

In compensation terms it was the biggest IPR case to be heard at the Intermediate People's Court of Shenzhen, a boomtown in south China's Guangdong Province.

At the request of the American multinational, the Shenzhen Intermediate People's Court seized and sealed all of the disputed products and relevant reference materials on January 20, 2005.

In April 2005, Shenzhen Dongjin, through its subsidiary company in Beijing, countersued Intel for technology monopoly at the No. 1 Intermediate People's Court in Beijing.

The two companies said the out-of-court settlement respected the Chinese law on IPR protection and the positive efforts made by Chinese courts. The details of the settlement were kept confidential.

He Jiannan, general manager of Shenzhen Dongjin, said the settlement demonstrated the progress made by China in technology innovation, company management and IPR protection.