Intel Investors - Here's an IMPORTANT DETAIL for Intel concerning the upcoming FTC trial.
NO CHIP SET ISSUES will be introduced at trial !
I guess the Wall Street Journal, C|NET, New York Times, etc. didn't want any of us to know the details.
Freedom of the Press means FREEDOM for them to publish ONLY WHAT THEY WANT US TO KNOW !
"The move to limit the scope of the case was reaffirmed last week when Administrative Law Judge James Timony, acting on his own initiative, excluded evidence presented by the government concerning alleged anticompetitive conduct by Intel in the chip-set market. Timony's ruling in Intel's favor cited the FTC's "promise" that it "will not undertake in this case to prove or offer any evidence of the existence of any adverse competitive effects in any market for graphic controller or chip set devices, or on the development of graphics controller or chip set technology." "
Paul
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techweb.com
March 08, 1999, Issue: 1051 Section: News
Intel scores court, comms coups -- Government, Intel agreed they will not consider chip sets in FTC's antitrust case George Leopold
Washington - As the antitrust case against Intel Corp. opens here tomorrow, EE Times has learned that U.S. and Intel attorneys agreed as early as last August to narrowly focus the Federal Trade Commission's case on general-purpose microprocessors, excluding key areas of concern like graphics controllers and chip sets.
The move to limit the scope of the case was reaffirmed last week when Administrative Law Judge James Timony, acting on his own initiative, excluded evidence presented by the government concerning alleged anticompetitive conduct by Intel in the chip-set market. Timony's ruling in Intel's favor cited the FTC's "promise" that it "will not undertake in this case to prove or offer any evidence of the existence of any adverse competitive effects in any market for graphic controller or chip set devices, or on the development of graphics controller or chip set technology."
Timony cited an Aug. 25, 1998, letter from an FTC attorney to Intel counsel Michael Denger to support his ruling. Intel said the letter is under seal, but confirmed that both sides agreed early on not to pursue Intel's actions in the graphics-controller and chip-set markets.
Other sources said the FTC didn't formally stipulate it would not introduce evidence about these markets. "It's all coming down to the interpretation of what that [agreement] meant," one source said.
Intel has aggressively targeted both peripheral-chip markets as it seeks to expand the reach of its microprocessor architecture.
There were widespread reports after the FTC case was filed last summer that the government would seek to broaden its case to include other charges, including Intel's moves in chip sets (see June 15, 1998, page 1).
Sources said Timony does not want to consider evidence asserting anticompetitive conduct by Intel in other markets, preferring instead to stick with the narrow complaint approved by FTC commissioners last year.
Nevertheless, industry and legal sources on both sides expect the FTC to call witnesses who will testify about Intel's actions in other markets to support the government's primary assertion that Intel exercises monopoly power over the general-purpose microprocessor market.
Timony's action limiting the scope of the hearing was prompted by the release of the outline of the government's antitrust case against Intel. FTC lawyers largely stuck to the three allegations made in a June brief, holding that Intel abused its monopoly power by allegedly forcing Intergraph Corp., Compaq Computer Corp. and Digital Equipment Corp., now a unit of Compaq, to turn over their patented technologies in exchange for access to Pentium chips and technical data (see March 1, page 4).
In its pre-trial brief, the FTC accused Intel of functioning as "a privately administered compulsory licensing regime" to gain access to rivals' technology.
Large sections of the government's case were not released. But part of the brief describing Intel's dealings with Compaq prompted Timony to block the FTC's introduction of evidence on Intel's moves in the chip-set market.
According to FTC documents and sources, Timony on Feb. 5 denied Intel's motion to exclude evidence the company deemed prejudicial. One complaint in the broad order dealt with an FTC plan to offer evidence through its economic expert, Frederic Scherer, a Harvard University professor of corporate management, that Intel's alleged anticompetitive conduct limited Compaq's ability to innovate.
The FTC's Feb. 25 pre-trial brief stated that Compaq and Intel concluded a cross-licensing agreement in January 1996. According to Timony's March 2 ruling, Intel made a "lump sum royalty payment" to Compaq in exchange for the "right to incorporate Compaq's patented technology in Intel microprocessors, chip sets and motherboards, and to sell these products to OEM[s] worldwide."
The FTC asserted that the terms imposed by Intel to resolve the dispute "impaired Compaq's ability to differentiate its products through chip set innovation and other system-level design efforts."
Timony ruled that while this evidence was relevant to the antitrust case, it contradicted the FTC's promise not to broaden the antitrust case by pursuing Intel's efforts in the graphics-controller or chip-set markets.
As a result, Timony reversed his earlier decision and granted Intel's motion to exclude Scherer's evidence.
Scherer has emerged as a central witness in the antitrust case. Intel asserted in its pre-trial brief that Scherer conceded during questioning he could find no evidence that Intel had stifled innovation in the microprocessor market.
Compaq's involvement in the case against Intel remained unclear until the FTC filed its antitrust brief last June. Compaq, Intel's largest volume customer, joined the case as a result of its 1994 suit against Packard Bell NEC Inc. for using patented Compaq technology in Packard Bell motherboards. Intel, the supplier of the motherboards, intervened on Packard Bell's side.
Responding to Compaq's assertion of its intellectual-property rights covering its motherboards, the FTC complaint alleged that Intel cut off technical information Compaq needed to design systems based on Intel's newest Pentium chips.
"That Intel was willing and able to coerce [Compaq, its largest customer] speaks volumes about Intel's market power and its willingness to use it," the FTC said in its Feb. 25 outline.
'Basic allegation' only
Intel attorneys have for weeks downplayed reports that the FTC would seek to broaden its antitrust case. "I don't expect the case to go beyond [the FTC's] basic allegation" that Intel monopolizes the market for general-purpose microprocessors, said Peter Detkin, Intel's assistant general counsel.
Legal experts added that it's not unusual for judges to seek to limit the scope of antitrust cases. "Judges like to narrow the issues," said Mike Remington, a patent attorney in Washington and former chief counsel to the House Judiciary intellectual-property subcommittee.
Intel executives said the two sides agreed on a series of stipulations that included an FTC promise not to offer evidence on the chip-set or graphics-controller markets. In general, "Both sides stipulated they won't try the patent cases underlying the dispute," an Intel official said.
Intel spokesman Chuck Mulloy called Timony's ruling "consistent with what we thought the case was about all along." He added that the ruling reinforces Timony's view that the focus of the antitrust case should be the general-purpose microprocessor market.
Industry executives and analysts were divided over whether an investigation of Intel's core-logic or graphics businesses should be a central part of any antitrust case. When Intel entered the core-logic market in 1993, ostensibly to get its then-new Pentium processor quickly into the market, as many as 30 companies developed chip sets for X86 processors. Today three companies in Taiwan split a minority stake in that market and Intel commands a leading share.
Providing information on its processors and a license to its CPU processor bus has been one way Intel exercised some control over the chip-set market. "I do believe when Intel made the decision not to license the P6 [Pentium II] bus, that was a watershed moment," said one executive for a company that had tried unsuccessfully for several years to get a license to that bus. "They have misused their right to the technology to make a flat industry that has no differentiation. It has stagnated."
While some argue that Intel has carved out a significant business in core logic, others disagree. "There's no fundamental benefit to Intel's owning the core-logic business," said Martin Reynolds, principal analyst at Dataquest Inc. (San Jose, Calif.). "They don't want to compete with the Taiwanese manufacturers."
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