INTEL loses a round to Intergraph

John Boyer (
Wed, 09 Jun 1999 14:47:38 -0500

Wow, Some excitement in my backyard. OK, it's not that exciting....

Intergraph ( contends the entire Pentium familiy
has violated their patents.
See for all the gory details.

Also, from the Intel side....

["In July 1998, the Company received a letter stating that Intergraph
believes that the patent damages will be "several billion dollars by the
time of trial." In addition, Intergraph alleges that Intel's infringement
is willful and that any damages awarded should be trebled. "]



HUNTSVILLE, Ala. (AP) - A federal judge has ruled that Intel Corp.
(Nasdaq:INTC - news) had no license
to use Intergraph patented technology in its Pentium family of processors,
rejecting Intel's argument that the
patents were included in an old agreement with National Semiconductor Corp.
(NYSE:NSM - news)

The pretrial ruling by U.S. District Judge Edwin Nelson was an early blow
for Intel in its defense against a
lawsuit brought by Intergraph of Huntsville, a workstation manufacturer, in
November 1997. Intergraph contends Intel, which makes
computer chips, infringed on its patents, used coercive business practices
and violated antitrust laws.

Nelson's ruling addressed only Intel's claim of a licensing agreement
governing the Intergraph patents. The allegations of patent
infringement, antitrust violations and illegal practices will be addressed
at a trial in February 2000.

An attorney for Intergraph, Bill Baxley of Birmingham, did not immediately
return a call seeking comment Monday.

In the news release, Intergraph Chairman and Chief Executive Jim Meadlock
said Intel repeatedly has claimed they have a license to
the ``Clipper'' chip patents.

``The court affirms they don't have such a license,'' Meadlock said. ``We
believe the entire Pentium family infringes on our patents.''

A spokesman for Intel, Chuck Mulloy, said Monday an appeal of Nelson's
order was being considered. But the license claim was
only one of several defenses Intel planned to raise in the lawsuit, he said.

``We are disappointed and we respectfully disagree with the judge,'' Mulloy

Intergraph makes computer workstations mated to its software, with the core
of its business involving elaborate computer graphics
for technical design, mapping and animation. For a time, Intergraph used
its own high-end microprocessor, the ``Clipper,'' in its
workstations but later moved to an Intel-based system and abandoned the

Intergraph claims when it tried to enforce the Clipper patent, Intel denied
the company technical information and advance copies of
new microchips - both crucial to developing new products. Intergraph also
contends Intel chips were made using Intergraph

Intel claims it did nothing illegal. In the motion denied by Nelson, the
chipmaker claimed the Clipper technology fell under a
long-standing cross-license agreement with NSC.

According to the Intergraph news release, Intergraph and NSC each bought
parts of Fairchild Semiconductor Corp. in concurrent
transactions in 1987. Intergraph bought Fairchild's Advanced Processor
Division, the original developer of the Clipper chip, it said.

``The undisputed facts establish that NSC had no legal authority to grant a
license, as the patents at issue belonged not to NSC but
to a legally distinct corporation - Fairchild,'' Nelson wrote in his order.
``Intel thus never received a license from any entity with the
power to grant one.

``The fundamental flaw in Intel's license defense is that the alleged
license would have originated from NSC, while the Clipper patents
quite clearly belonged not to NSC but to Fairchild, a separate
corporation,'' Nelson wrote.

Mulloy said the judge's ruling had ``very broad and unprecedented
implications'' for the high-tech industry.