For breach of agreement, NVIDIA Corp. has registered a countersuit against Intel Corporation in the Court of Chancery in the State of Delaware.

The action also seeks to end Intel's license to NVIDIA's graphic processing and 3D computing patents.

NVIDIA's countersuit was made in response to a suit filed by Intel during the last month in the Delaware court, aggressively claiming that the 4-year old chipset license deal does not expand to work on Intel's future generation processors - Nehalem aka Core i7 chips.

Jen-Hsun Huang, president and CEO of NVIDIA said, “NVIDIA did not initiate this legal dispute.”

“But we must defend ourselves and the rights we negotiated for when we provided Intel access to our valuable patents. Intel's actions are intended to block us from making use of the very license rights that they agreed to provide,” Huang added.

This time, the court will finalize the two basic queries whether Nvidia is licensed to make chipsets for Nehalem CPUs under the 2004 contract and whether Intel will be finished access to Nvidia's graphics patent portfolio.

NVIDIA signed up the disputed contract five years back in 2004 to bring platform innovations to Intel CPU- based systems.

In return, Intel took a license to NVIDIA's rich portfolio of 3D, GPU, and other computing patents.

NVIDIA had been looking for over a year to settle the discrepancy with Intel in a fair and reasonable manner.