Elmer Re...hmaly, here is the decision. Please note this was not a lawsuit but the results of arbitration. There was a completely seperate lawsuit regarding copyright violations steming from AMD's use of i287 microcode. <<<<<<
Elmer, thanks for the posting. I see that there was an actual termination agreement, but Intel didn't follow it. In the end, Intel would have been wise to terminate the contract according to its terms, although Intel did get what it wanted in the end at a very reasonable cost. I also see that both Dale and I are right in our versions. Here is the part I am talking about.
One concrete example of Intel's failure to negotiate in good faith was its treatment of
AMD's Quad Pixel Display Manager (QPDM), a graphics chip. Although Intel promised
in 1984 to accept the QPDM from AMD provided the parties agreed on its specifications,
the arbitrator found Intel made no actual attempt to negotiate the remaining differences
as to specifications. Instead, partly in order to avoid having both to give AMD the 80386
and to eliminate royalties on other products, Intel summarily rejected the QPDM. In
doing so, the arbitrator found, Intel breached the implied covenant of good faith and fair
dealing as well as "its implied covenant to negotiate reasonably to further the goals of the
relationship between the parties ...."
The arbitrator also found, however, Intel was not obliged under the contract to accept the
QPDM or other products that would have earned AMD the 80386 rights. Apart from
Intel's breach, moreover, the arbitrator found AMD had unnecessarily delayed in seeking
alternative ways to enter the 32-bit chip market. Having inferred by mid-1985 that Intel
was not going to accept the AMD parts that could earn AMD the 80386, AMD should
have sought arbitration [***11] at that time or immediately begun reverse engineering
the 80386 when it became available in July 1986. n5 Instead, AMD did not begin reverse
engineering the 80386 until a later time and did not produce its own 80386 chip--known
as the Am386--until March 1991. "In short, Intel's plan succeeded ... because of AMD's
inertia." For this reason, the arbitrator declined to award AMD the hundreds of millions
of dollars it sought in lost 80386 profits. <<<<<<<
But here is another interesting part.
The parties entered into the contract at issue in February 1982. According to its
preamble, the agreement was intended "to establish a mechanism for exchanging
technical information so that each party acquires the capability to develop products
suitable for sale as an alternate source for products developed by the other party." During
the 10-year term of the contract (cancelable after 5 years on one year's notice by either
party), either company could elect to be a second source for products offered it by the
other. The nondeveloping company would receive technical information and licenses
needed for it to make and sell the part. The developing company would receive a royalty.
In addition, the developing company would earn the right to be a second source [***6]
for products developed by the other party. The terms of exchange--the respective value of
the products--were to be calculated by a specified equation from the complexity and size
of the parts. <<<<<<<<<
You can see that AMD hardly got the second source agreement for free. AMD had to pay royalties or exchange other products, and the value was to be determined by a specified equation. Why do you continually berate AMd by calling them a deadbeat, when AMD was paying royalties according to their contract. AMD didn't pay a royalty for the 386 copy because it was part of the penalty Intel had to pay for their breaching of their contract. Also clearly it was Intel who originally breached their contract by not notifying AMD 5 yrs in advance that Intel wanted to cancel the contract; instead trying to use the VPDM issue to breach the contract without giving AMD an advance warning. |
