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Technology Stocks : Intel Corporation (INTC)
INTC 47.14-6.1%3:59 PM EST

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To: Barry A. Watzman who wrote (21788)5/14/1997 12:44:00 AM
From: mxyztplk   of 186894
 
Barry,

Another aspect of the case also bears some examination. That is, exactly what degree of benefit could have accrued to Intel.

We don't yet even know the patent numbers claimed to have been infringed. [This alone is somewhat strange, since DEC could easily have listed 10 7-digit numbers in its press release.] Regardless, however, DEC said the alleged infringement was in certain technologies related to "cache management, branch prediction and high-speed instruction processing". Because there are so many active and lapsed patents in these areas, it is hard to be certain how extensive the alleged infringement is.

However, most patents in these areas are either for incremental improvements which yield a fairly small percentage gain in performance (a few percent or less), or are simply one way to perform a function which can be done roughly equally well in several ways. This would be important in measuring possible damages [i.e., even if the alleged infringement is shown to have occurred.

Since I believe DEC will probably not be able to show intentional infringement, Intel would presumably be able to present convincing evidence that:

1. The performance differences would be small, meaning that the Intel processors would have performed very close to the same speed as otherwise - thereby not being significant in establishing damage to DEC [how could DEC have benefitted from very minor performance differences].

2. Where other methods of implementation also could have been used, Intel could have licensed them [i.e., assuming they did not already have access to them] from other sources - so again, the difference would likely have been small [say, in the chip area].

So, in the end, even in the event of accidental infringement, it may be that Intel could show that the damage was small, inasmuch as Intel would have delivered about the same product at about the same time, and DEC would not have been able to prevent that by denying Intel its patents. So perhaps the only amounts due to DEC would be reasonable license fees for the patents, in agreement with fees generally charged for such technologies which are of minor benefit and where ready alternatives exist.

Of course, there is still the matter of stopping the possible infringement - but I believe Intel will ensure this is done long before this case ever gets to trial, should it ever come to that.

[Where is lawdog when you need him - lawdog, any thoughts?]

Best regards,

Arno
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