AMD and Intel Continue Disagreement Over Chip Licensing Pact

By Michelle Maisto  |  Posted 2009-03-16 Print this article Print

AMD filed new documents with the U.S. Securities and Exchange Commission this week, in reaction to Intel's allegation that in creating GlobalFoundries, AMD breached terms of a 2001 cross-licensing agreement between the two. Additionally, Intel seeks to make public a confidential portion of the agreement, which it sees as relevant to its position, but AMD refuses. Thus, a formal dispute resolution process has been initiated.

Advanced Micro Devices  is fighting back against allegations by Intel.

Intel accused AMD of breaching the terms of a 2001 cross-licensing agreement when AMD created GlobalFoundries - the $4.3 billion spinoff of its manufacturing arm, announced on March 4 with tech investment partner ATIC. Intel says GlobalFoundries is not a subsidiary under the terms of agreement, and therefore not licensed under the patent agreement.

AMD denies the breach allegation and filed new documents with the U.S. Securities and Exchange Commission on March 16. These documents state that Intel - in accusing AMD of a breach - has breached the agreement itself.

"[AMD] has informed Intel that [AMD] maintains that Intel's purported attempt to terminate [AMD's] rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel, which gives [AMD] the right to terminate Intel's rights and licenses ...while retaining [AMD's] rights and licenses..." the 8-K reads.

Intel's displeasure with AMD's creation of GlobalFoundries was first expressed Oct. 7, when Intel made a statement saying it was investigating whether GlobalFoundries, which AMD had announced plans to create, was in violation of a chip-licensing agreement between the two - a charge AMD denied on Oct. 8.

"AMD does not have a right to transfer out patent rights to a third party," Intel spokesperson Chuck Mulloy told eWEEK. "AMD has said they're in full compliance, and we disagree."

"Then, there's another portion of the agreement that's not public," Mulloy continued. "All we've said is, -Make that portion public.' People would have a clearer understanding of our position, if that were public."

This is not the first time AMD and Intel have thrown the law at each other.

In 2005, AMD filed a complaint alleging that Intel and its Japanese subsidiary violated the Sherman Act and the California Business and Professions Code, including, says a statement on the Intel Web site, "providing secret and discriminatory discounts and rebates and intentionally interfering with prospective business advantages of AMD."

The statement goes on to say: "This is an industry that is performing exactly as a competitive industry should perform."

Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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