Tuesday, March 17, 2009

Intel and AMD in licensing dispute

Intel has formally accused AMD of breaching the two companies' 2001 cross-licensing agreement.

Here's why Intel thinks AMD is breaching the agreement:

Intel believes that Global Foundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. Intel also said the structure of the deal between AMD and ATIC breaches a confidential portion of that agreement. Intel has asked AMD to make the relevant portion of the agreement public, but so far AMD has declined to do so.

AMD responded with the following statement:

Intel's action is an attempt to distract the world from the global antitrust scrutiny it faces. Should this matter proceed to litigation, we will prove not only that Intel is wrong, but also that Intel fabricated this claim to interfere with our commercial relationships and thus has violated the cross-license.

Our Asset Smart transaction and the creation of a game-changing company, GLOBALFOUNDRIES, pose a threat to Intel’s business model and illegal dominance in the x86 market, as does our mix of intellectual property and our technology roadmap. And as the spotlight is cast ever more harshly on Intel’s anticompetitive practices by regulators around the globe, Intel is attempting to do whatever it can to limit competition, stifle customer choice and constrain AMD’s market share.

According to AMD's form 8-K filing, Intel isn't kidding about taking away AMD's license—it "purports to terminate [AMD]'s rights and licenses under the Cross License in 60 days if the alleged breach has not been corrected."

Some background: The Patent Cross License Agreement benefits both companies by granting each company license to the others’ patents. This is not a technology license. To put it simply, the pace of innovation is fast and furious in our market, and the agreement’s purpose is to ensure that each company can innovate freely in its product designs, without threat of patent infringement litigation over our respective innovations. To be clear, Intel leverages innovative AMD patents critical for its product designs under the cross license. This includes AMD patents related to 64-bit architecture extensions, integrated memory controller, multi-core architecture, etc. The cross-license is very much a two-way street.

Intel currently uses AMD's x86-64 technology in all shipping Pentium and Core processors, while AMD, naturally, uses Intel's x86 tech in all of its PC processors.

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