Intel, AMD dispute settlement announced

Thursday, November 12, 2009, 15:10 by Tech Correspondent

Intel and AMD today announced a historic settlement of all their outstanding IP disputes. Intel is the leader in the global microprocessor market, while AMD is No.2. The Intel-AMD settlement was jointly announced by the two companies. Intel is famous for its Pentium series of chips, while AMD makes the Athlon series.

As per the settlement, Intel will pay AMD $1.25 billion for burying the hatchet. The announcement of the Intel-AMD agreement drove AMD shares up 30%.

The Intel AMD settlement will end all the outstanding legal disputes in intellectual property (IP) and patents, Intel and AMD said. Both the companies acknowledged that they (Intel and AMD) had a difficult past and fought long-winded legal battles. The settlement, said Intel and AMD, helps the two companies focus on product development and innovation, rather than fight IP disputes in court.

As per the Intel AMD dispute settlement both companies get patent rights from a fresh five-year cross license pact. Intel and AMD will also forego any earlier claims of breach from the previous license pact. Intel will pay AMD $1.25 billion. Intel said in a statement that as per the dispute settlement, it has also agreed to follow a set of business practice provisions.

As per the Intel-AMD settlement, AMD will also drop all ongoing court cases, including the case in US District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide. The agreement will be made public in filings with the Securities and Exchange Commission.

AMD has ongoing disputes with Intel in cases filed in Asia, Europe and Japan. The anti-trust authorities have pulled up Intel for breach of rules. The settlement with AMD enables it to make a clean break with the past and get on with the business of growing its product bouquet and marketshare.

Barely last week, the New York Attorney General Andrew Cuomo had sued Intel for anti-competitive practices. Hearings on that case have not started yet. The suit alleges that Intel coerced PC manufacturers into buying its processors, distorting the competitive market. Cuomo’s lawsuit accuses Intel of “an illegal campaign to deprive AMD of distribution channels.” The suit says that Intel conducted a global campaign to maintain its monopoly in the market for X86 processors. Intel and AMD compete to have their processors installed in computers made by manufacturers like HP, Dell and Lenovo.

With the Intel-AMD antitrust settlement, what seemed to be a long-drawn battle across several courts across the globe has come to an abrupt end. As part of the dispute settlement, AMD will withdraw all the cases filed against Intel across the world. It’s not clear what will happen to the suits independently initiated by regulators in several nations.

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