WILMINGTON, Del. (Legal Newsline) - Intel Corp. has agreed to pay $6.5 million to settle a struggling antitrust lawsuit filed by former New York Attorney General Andrew Cuomo, now the state's governor.

Intel said Thursday that current Attorney General Eric Schneiderman has agreed to drop the lawsuit, a little more than a month after he asked a federal judge in Delaware to allow him to pursue claims in New York state court.

U.S. District Judge Leonard Stark had granted a trio of motions filed by Intel that significantly limited any potential recovery.

"We have always said that Intel's business practices are lawful, pro-competitive and beneficial to consumers, and we are pleased this matter has been resolved," said Doug Melamed, senior vice president and general counsel at Intel.

Stark granted two motions to dismiss and one motion for summary judgment. The lawsuit alleges the company threatened and punished companies it viewed as working too closely with its competitors.

The summary judgment opinion bars Sherman Act damages claims for microprocessor purchases that came before Nov. 4, 2005, and Donnelly Act and Executive Law damages and penalties claims for purchases before Nov. 4, 2006, because of expired statutes of limitations.

Stark also dismissed Donnelly Act damages claims brought on behalf of consumers and New York's claims on behalf of non-state public entities.

Schneiderman proposed that New York dismiss its federal law claims, divesting the court of jurisdiction. He added that the court should dismiss state law claims without prejudice so that it may re-file and pursue them in a state court.

Cuomo filed the lawsuit in November 2009. He said the company cut off payments it was making to computer makers, funded those maker's competitors and ended joint development ventures

Cuomo says Intel paid rebates -- which he said were basically payoffs -- to obtain exclusive agreements with computer makers. Those payments were large enough to be the difference between loss and profit for some computer makers, he said.

Intel paid $2 billion to Dell in 2006, threatened HP with the derailment of a server technology and paid IBM $130 million not to launch an AMD-based server product, Cuomo says.

It also threatened to stop funding for an IBM/Intel joint project if IBM marketed AMD-based server products, he alleges.

A copy of the settlement was posted on Intel's website, but nothing has been filed with the court, according to the case's online docket.

From Legal Newsline: Reach John O'Brien by e-mail at jorienwv@gmail.com.