Volkswagen
2016 Volkswagen Beetle convertible/caranddriver.com

Germany’s Volkswagen has struck a deal with U.S. semiconductor maker Broadcom, ending a billion-dollar patent lawsuit that pitted the carmaker against its supplier, a source close to Volkswagen told Reuters on Wednesday.

The companies signed an out-of-court settlement, the source said, adding that a court hearing scheduled for Friday had now been canceled. Volkswagen declined to comment.

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Broadcom did not immediately respond to a request for comment.

Der Spiegel news magazine reported in early November that California-based Broadcom had made a patent claim for more than $1 billion against Volkswagen and threatened to seek a judicial ban on the production of several car models.

Bloomberg first reported about the case on Wednesday.

Patent claims brought against manufacturers by supplier firms, often seeking large compensation amounts, are increasingly frequent as the industry’s digital transformation advances.