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Intel likely to countersue Digital - lawyers
Reuters Story - May 14, 1997 20:19
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By Samuel Perry
PALO ALTO, Calif., May 14 (Reuter) - Digital Equipment
Corp.'s patent infringement lawsuit against Intel Corp. is a
risky and expensive assault likely to prompt a counterstrike
from the world's biggest chip maker, legal experts said
Wednesday.
Intel said Wednesday it did not believe any of its products
infringe on Digital's patents, and that it intended to
vigorously defend itself. But for now at least, Intel stopped
short of filing a countersuit.
Digital's lawsuit surprised the computer industry and legal
experts, some of whom were startled by DEC's brazen approach.
The company trumpeted its complaints in full-page
advertisements in the San Jose Mercury News, Intel's hometown
newspaper, as well as national dailies.
"It is inconceivable to me that Intel would not sue them
back," said Michael Barclay, an intellectual property lawyer in
Palo Alto, Calif., home for many high-technology companies.
Digital said on Tuesday it had filed suit in U.S. District
Court in Worcester, Mass., claiming Intel's popular Pentium,
Pentium Pro and Pentium II chips -- key component's in 85
percent of the world's personal computers -- had infringed on
10 Digital patents.
Digital offers the competing Alpha chip, which works at
faster speeds than Intel's chips but has met with little
success in the market.
Legal experts said Digital has taken on a superpower with
many patents to its credit, which could help Intel fight back.
Not only did Intel virtually invent the microprocessor, but the
company has bet its future on the wildly successful chips.
"They're not suing a copycat. Intel invented this," said
Barclay, who worked as an engineer for Intel 20 years ago,
before entering the legal profession.
Intel noted it has about 1,000 patents for semiconductors,
microprocessors and other high-technology computer components,
an arsenal of intellectual property that could come in handy in
any counterclaims, experts said.
Digital, based in Maynard, Mass., is a big Intel customer
whose heyday was in the mid-1980s. It has struggled for years
to turn around its business, which faltered partly because it
did not anticipate the rapid growth of personal computers based
on technology from Intel and Microsoft Corp.
Margreth Barrett, intellectual property professor at
Hastings College of Law in San Francisco, said patents have
become more valuable in the past 15 years because of some
protection offered by federal courts.
Digital's quick-strike action -- it did not approach Intel
to try to settle the claims -- was a risky strategy that has
not always worked for chip makers in the past, experts said.
In 1990, for example, a federal judge ordered Motorola Inc.
and Hitachi Ltd. each to stop shipping their chips while a
patent suit was underway, saying such cases should not end up
in federal courts in the first place.
That ruling threatened the supply of Motorola's popular
high-end 68030 microprocessor, then used by Apple Computer
Inc., Hewlett-Packard Co. and others, and the dispute was
quickly settled out of court.
Digital has asked for similar relief from the courts to
force Intel to stop shipping chips it claims use Digital
technology, and has sued to collect triple monetary damages.
Legal experts believe Digital fired the first salvo partly
to ensure any trial would take place in federal court in its
home territory of Massachusetts, which one litigator described
as "the original Xenophobic jurisdiction."
If the two sides cannot settle their differences, lawyers
said preparations for trial could take years, involving dozens
of lawyers, scores of depositions and millions of dollars in
legal fees.
"I can see that this thing is just going to be embroiled in
litigation for years," said Barclay. "Unless these parties get
together and quickly resolve it, you supsect that the lawyers
are going to make more money than their clients."
Separately, Cyrix Corp. said on Tuesday it also filed a
patent infringement suit against Intel, alleging that Intel
products infringed on patents issued to Cyrix on Tuesday.
Intel stock rose 37.5 cents to $152.75 and Digital fell 75
cents to $34.625 on the New York Stock Exchange. |
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