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Intel runs private, compulsory licence regime – FTC

Air supplies a go-go as Stan reserves right to trade IP in 'value for value commercial exchanges'

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Intel has been running "its own privately administered compulsory licensing regime," says the US Federal Trade Commission in pretrial documentation released yesterday. The FTC is due to open its antitrust case against the chip giant on 9 March, and although its case is a lot tighter-looking than the rival attraction, DoJ versus Microsoft, this one should run and run as well. The FTC intends to argue that Intel is a monopoly, and uses it power to extract patents and deals from its partners. Spats between Intel and Compaq, DEC and Intergraph (currently running its own antitrust action against Intel) will be used in evidence will figure prominently, and Intel's practice of cutting-off access to technical data during disputes will be argued over in some detail. Intergraph, for example, which is claiming Intel tried to blackmail patents out of it, had its 'air supply' (which, aptly, is an expression Microsoft execs claim an Intel exec made up) cut off in order to encourage it to surrender. A judge last year seemed to agree, ordering Intel to switch the oxygen back on pending the outcome of Intergraph's suit. Intel, bless it for its plain-speaking approach to business, won't be denying that it does this kind of thing, but will be arguing that it's perfectly within its rights to do so. If somebody's suing you, it's unreasonable to expect you to help them, and Intel says the FTC is trying to prevent it "from using its intellectual property to barter in value-for-value commercial exchanges." Now there's a loaded expression, and refreshing, too - Microsoft denies everything, but Intel wants to prove it has the right to engage in 'you scratch my back' business arrangements. The FTC also argues that by suppressing innovation Intel has held the market back. But that's going to be a difficult one to prove, as the paranoid survivalists at Intel have habitually jammed innovation (Intel-scripted innovation, naturally) down the customers' throats far faster than the customers themselves have thought necessary or realistic. In its own filing yesterday Intel argued first that it wasn't a monopoly, second that the FTC's economist, Harvard professor Frederic Scherer, had failed to identify any harm done by Intel practices, and third that even monopolies have the right to intellectual property. The FTC wants Intel to licence its technology freely. If the FTC can prove monopoly, then Intel is in trouble, because monopolies only have rights to their intellectual property up to a point - restrictions on their use of that property are likely to be imposed. But if Scherer really can't figure out harm, he must be about as switched-on as the dismal economists who've been witnesses in the Microsoft case. Intergraph certainly looked harmed, and back in the early days of the Pentium you'll recall that Intel supported Dell, Gateway and PB, while Compaq, which was still trying to do its own innovations, was left with an embarrassingly low share of the Pentium market. Prof Scherer, if the FTC can show Intel was being a naughty monopoly when it did this stuff, you can demonstrate harm. ®

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