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Last October, Acer said it had sued HP for patent infringement, alleging violation of seven patents.

HP sued Acer the previous March for patent infringement, aiming to stop the Taiwan firm from selling some products in the United States. That drew a countersuit from Acer in July.

The confidential settlement agreement resolves all claims asserted in three federal court lawsuits and two US International Trade Commission investigations between the parties.

As a result of the settlement agreement, each action concerning Acer and HP will be dismissed, the two companies say.

"The impact from the settlement was not big and we think both Acer and HP will continue to focus on their core businesses," says an Acer spokesman, despite admitting to not being aware of any financial terms to the settlement.

Acer said last week its sales would grow by more than 50% this year, raising its previous forecast as demand for laptops remains robust despite consumers feeling the pinch from an economic slowdown and rising fuel and food prices.