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FOCUS-Intel sues Digital, may stop supplying Pentiums
Reuters Story - May 28, 1997 08:32
FINANCIAL ELI ENT US DEC AMD V%REUTER P%RTR
By Eric Auchard
NEW YORK, May 28 (Reuter) - A brewing legal battle between
Intel Corp. <INTC.O) and Digital Equipment Corp.
heated up on Wednesday when Intel countersued Digital and
suggested it may stop providing its Pentium chips to the
personal computer maker within months.
Intel, the world's dominant supplier of semiconductors used
in personal computers, including a broad range of PCs made by
Digital, said it sued Digital alleging that it refused Intel
requests to return confidential Intel information.
A spokesman for Intel, which is based in Santa Clara,
Calif., also said the company believes that its contracts to
supply its highly popular Pentiums to Digital extend only
through the third quarter of this year.
The spokesman said the contract assertion was initially
made in a May 15 letter by Thomas Dunlap, Intel's chief legal
counsel, to Thomas Siekman, his Digital counterpart, that was
made part of Intel's suit against Digital.
The Intel suit comes two weeks after Digital shocked the
industry by filing a lawsuit claiming Intel's Pentium family of
semiconductors had violated Digital patents.
Digital said the Pentium chips violated patents associated
with Digital's Alpha chip, an advanced microprocessor it had
sought unsuccessfully to position as a mainstream rival to
Intel chips.
While both Digital and Intel manufacture microprocessors,
Digital's Alpha chips are largely used in powerful business and
research computers, while Intel's chips are used in a wide
range of personal computers made by a number of companies.
Intel said its lawsuit, filed in U.S. District Court in San
Jose, Calif., covers a broad range of Intel technology used not
only in Digital microprocessors, but also in personal computers
and other products marketed by Digital.
The company said it asked Digital to return confidential
information pertaining to Intel products that it had
transferred to Digital in recent years, but Digital refused,
prompting the Intel suit.
The Intel spokesman said the company also took issue with
recent assertions by Digital that the computer maker has
"long-standing supply agreements with Intel." Digital made the
comment in announcing its suit against Intel.
In a letter dated May 20, Digital responded to Intel by
saying that Digital has had a direct purchasing relationship
with Intel for more than two decades and that it extended its
purchasing agreement last year until June 30, 1999.
But an Intel spokesman said Wednesday his company continued
to believe that its contracts to supply Pentiums to Digital
extend only through September.
Digital said both companies would be hurt if Intel
materials were withheld from Digital, a move that would prevent
Digital from releasing on schedule a new line of PCs based on a
new generation of Intel chips.
The Maynard, Mass.-based computer maker also said it had
sought to keep its dispute with Intel limited to a technology
dispute and not to have it spill over to affect Digital's
"commercial" ties to Intel.
The latest legal wrangle is one in a long and twisted
lineage of intellectual property fights that have divided the
highly competitive microprocessor industry.
For example, Advanced Micro Devices Inc., among
others, waged battle against Intel earlier in the decade in a
successful effort to win the right to make Intel-compatible
microprocessors.
Intel said the lawsuit was filed in U.S. District Court in
San Jose, Calif.
The company said it asked Digital during the past week to
return confidential information pertaining to Intel products it
had transferred to Digital over the past few years.
Digital shocked the industry two weeks ago when it filed a
lawsuit claiming Intel's Pentium family had violated patents
associated with Digital's Alpha chip, an advanced
microprocessor it has sought unsuccessfully to position as a
mainstream rival to Intel chips.
The latest lawsuit is one in a long and twisted lineage of
intellectual property fights that have divided the highly
competitive microprocessor industry. For example, Advanced
Micro Devices Inc., among others, waged battle against
Intel earlier in the decade in a successful effort to win the
right to make Intel-compatible microprocessors.
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