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Technology Stocks : Intel Corporation (INTC)
INTC 46.48-4.5%Jan 30 3:59 PM EST

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To: Tom Todd who wrote (1912)6/21/1996 8:53:00 PM
From: Paul Engel   of 186894
 
Todd -

Cyrix holds a KEY intellectual property - an independently developed x86 architecture. They have survived all Intel's legal fights and prevailed. They did not vilolate any Intel microcode copyrights. In fact, their architecture may not even use microcode. (AMD's architecture did on their 386 & 486 - their K5 is different and in the "logic sense" is now a "don't care" - they have a 100 MHz K5 - Oh Jeepers!).

However, Cyrix may have indirectly used some Intel patents (the famous "Crawford Patent" comes to mind) under the grandfather clause from an authorized Intel Licensee. (Intel cross-licensed a bunch of competitors in the early 80s, much to their eventual regret.)

These cross licensed companies apparently have use of Intel's patents until the cross-license expires. Cyrix uses SGS-Thompson and IBM for wafer fab foundry services, both cross licenses of Intel. They also used TI prior to that, another Intel cross-licensee.

The deal is that these FOUNDRIES are the manufacturer of the device and, as they are cross-licensed by Intel, they can use Intel's patents even though the device design was done by a third party - Cyrix in this case. Cyrix is merely a "customer" of the foundry.

Myself, I think this is as hoaky as all hell - but that's the legal system that has given us O.J. Simpson - a free man, and Johnny Cochran.

So, what may hang over any acquisition of Cyrix is the eventuality of the expiration of Intel cross licenses. I would guess that Intel's legal department will have a new clause or two in any renewal of these agreements. These clauses will probably be in BOLD TYPE.

Intel may even raise the price a few dollars for one of these licenses.

Paul
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