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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (87228)	8/25/1999 9:56:00 PM
From: L. Adam Latham	Read Replies (2) \| Respond to of 186894

Paul and all: From 8/26/99 WSJ-Interactive: interactive.wsj.com Struggling Intergraph Blames Intel For Collapse of Its Computer Unit By DEAN TAKAHASHI Staff Reporter of THE WALL STREET JOURNAL Intergraph Corp., a struggling maker of computer workstations, is blaming onetime partner Intel Corp. for a layoff of 200 workers and the collapse of its computer business. Intergraph, of Huntsville, Ala., filed a motion Wednesday accusing Intel of failing to live up to a court-ordered injunction to supply Intergraph with vital microprocessor information. The action was the latest in an acrimonious antitrust lawsuit Intergraph filed against Intel in November 1997 in federal court in Birmingham, Ala. The suit alleges Intel cut off the flow of vital product information as part of a plan to stop Intergraph from enforcing its patents on Intel's customers. Intel denies the charges. U.S. District Court Judge Edwin Nelson had ordered Intel to continue supplying product information to Intergraph during the litigation. "Their stonewall tactics are working against us, whether they mean to hurt us or make an example out of us for the computer industry," James Meadlock, chief executive of Intergraph, said. Mr. Meadlock said Intel failed to live up to an April 1998 injunction, which required Intel treat Intergraph as it had before the dispute. The order was consistent with the federal government's position on the matter. Earlier this year, Intel settled an antitrust lawsuit with the Federal Trade Commission, promising the government it wouldn't withhold information from companies dependent upon it for survival in the course of intellectual-property disputes -- at least the ones where Intel hadn't been directly sued. Intel spokesman Chuck Mulloy said Intel is in "full compliance" with the court's order. He declined to comment on specific allegations in Wednesday's motions and said Intel doesn't intend "to make our case in the press." Mr. Meadlock said Intel failed to provide sufficient data on its Pentium III Xeon chip that made its debut in October 1998, and failed to provide a letter to a customer, Petroleos Mexicanos, that certified Intergraph's planned machine, as Intel had done for other customers. As a result, Intergraph said in its filing it lost out on a multimillion-dollar contract with the Mexican customer. Furthermore, as a result of more alleged delays by Intel, Intergraph said it is in the process of terminating its PC and general-purpose Intel server-computer business and laying off 200 of 400 employees in its Computer Systems subsidiary. "Because of recurring support problems with Intel, Intergraph has been forced to eliminate whole product lines and the Intergraph organizations responsible for their production," the filing alleged. Among other things, the filing alleged Intel came up short on information about a microprocessor-support product, canceled a plan to supply a computer board to Intergraph in July and failed to supply graphics information and data on flaws in Intel products. The filing also charges Intel stalled for several weeks when Intergraph sought to find a solution to a flaw discovered in March in an Intel computer board; Intergraph said it later learned some competitors received information far ahead of when Intergraph did. The result has been devastating to Intergraph, Mr. Meadlock said. "We are fundamentally defocusing our computer business" except for graphics products and products based on proprietary Intergraph technology. Intergraph posted a second-quarter loss of $12.4 million, or 25 cents a share, compared with a year-ago loss of $20.9 million, or 43 cents a share. The trial is scheduled for June 2000. Intergraph is asking the court to monitor the communication flow between the two companies to ensure Intel complies with the judge's injunction.