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

To: Brian Malloy who wrote (40896)	11/21/1997 1:58:00 PM
From: Joey Smith	Read Replies (1) \| Respond to of 186894

All: Latest on Intergraph/Intel feud....Just give me the PIIs!!! Intergraph Wants Its Pentium IIs (11/21/97; 1:00 p.m. EST) By Alexander Wolfe, EE Times Intergraph Thursday vowed that continued supplies of Pentium II processors must be guaranteed for any resolution of its acrimonious legal dispute with Intel. "That would have to be part of the settlement," said Jim Meadlock, chief executive officer at Intergraph. "We have to make very sure we have a clear agreement that Intel can't play games with." Intergraph will need ever-greater quantities of the CPUs, as it gears up for a major thrust to expand its share of the Windows NT workstation market in 1998. The two companies began their courtroom jostling, earlier this week, when Intergraph filed suit in U.S. District Court in Alabama charging Intel with patent infringement and alleged anticompetitive practices. Intel returned fire in a countersuit in U.S. District Court in San Jose, Calif., seeking a declaratory judgment voiding the Intergraph patents. Interestingly, Intel was preparing to sue Intergraph first, when the latter company beat it to the punch, according to authoritative sources. In the latest legal move, Intergraph said it will file a motion that asks the San Jose court to throw out Intel's declaratory-judgment request. It's not yet clear how the judicial maneuvering will play out. However, according to Meadlock: "I think there will be two weeks of legal juggling, and when the dust settles, there will be one suit in U.S. District Court in Alabama." Both companies said they are not currently holding talks aimed at reaching an out-of-court settlement. But Meadlock said that he and Intel president Craig Barrett have communicated twice via e-mail since the initial suits were filed. And a source close to Intel who requested anonymity said the company's "preference is to settle without litigation." At least one industry expert thinks the two companies may be able to bridge their differences. "It's possible they'll come to some reasonably quick resolution," said Michael Slater, principal analyst at MicroDesign Resources. However, Slater noted that Intergraph may not have an easy time ensuring it gets all the Pentium IIs it needs. "It's not that Intel won't meet the letter of any agreement they reach," Slater said. "It's a question of how flexible Intel is going to be. What happens when Intergraph asks for upside allocations? It seems like making an enemy out of Intel is not a good strategy." The meat of Intergraph's case against Intel are its allegations that Intel played fast and loose with rights to three Intergraph cache-management patents. Intergraph was granted the patents during the development of its 1980s-vintage Clipper RISC microprocessor. It's not clear which three patents are at issue; according to the U.S. Patent and Trademark Office's database, Intergraph holds seven cache-related patents. These include patent 4,933,835, titled, "Apparatus for maintaining consistency of a cache memory with a primary memory"; patent 4,884,197, "Method and apparatus for addressing a cache memory"; and 4,899,275, "Cache/MMU system." "The patent [issue] is the core cause of our suit," said Intergraph's Meadlock. "There is no doubt in our minds that they wanted access to our patents for free." Intel, for its part, is charging that Intergraph is seeking to reap licensing revenues from a host of unnamed computer-systems vendors. "By suing Intergraph, we put ourselves on the line for a large group of OEMs," said the Intel source who requested anonymity. "We have asserted our patent claims against any company we think has been violating them," said Wade Patterson, president of Intergraph Computer Systems, the corporate arm responsible for Intergraph's NT workstation business. "We are also in discussions with some companies that have asserted their patents against us first." Patterson declined to identify the companies. "This kind of stuff is going on all over the industry," Patterson added. "We've had companies come to us and say, 'You're violating such and such a patent.' And we come back and say, 'Well, you're violating such and such of ours.' In some cases, we've chosen to offensively assert patent rights against companies; in other cases we've done it defensively. In any case, what we do with our patent claims is no business of Intel's." As the suits wend their way through the courts, Intergraph believes it can continue to grow its workstation business. "We've done rather well with all the pressure Intel has put on us," said Meadlock. "We'd have done a lot better without this. I think we have as good a relationship with Intel as we

To: Brian Malloy who wrote (40896)	11/21/1997 3:34:00 PM
From: Jeff Fox	Read Replies (3) \| Respond to of 186894

Brian, re: RMBS royalty - NOT Jeff, can you share with us why you think this royalty is way out of line? Sure, several reasons, 1. A chipset does a host of functions of which the memory bus is but one. There is no reason to pay RMBS for any more than their IP, which is a small part of any chipset's value. 2. A 25% external royalty is a huge part of gross margin. Such a hit would make any chipset unprofitable to any manufacturer. 3. Intel selected RMBS. Without this endorsement nobody would be looking at it for PC memory. Intel has made RMBS. It is a good guess that Intel negotiated a contract with RMBS to its liking. Given the values I wonder if RMBS is paying Intel! 4. Rambus-D simply cannot work without Intel engineering envolvement. The timings and required circuit tricks are embedded with the technology process perameters. I suspect that Intel more investment with this than Rambus. They have likely pour circuit design resources, skills and test chips into assuring that Rambus-D works with high yields for their .25 process combined with all prototypes of the coming DRAMs. I would guess that it is Intel driving the development coordination across all DRAM manufactures. Again Rambus should be compensating Intel. Jeff