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Court ruling vapes Intel's Pentium patents

Ancestral NatSemi cross-licence ain't no good, says the judge

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Friday's ruling against Intel by Alabama district judge Edwin Nelson (Earlier Story) threatens the entire Pentium family of processors, If Intergraph is to be believed. Judge Nelson ruled that Intel does not have the right to use "Clipper" technology, and according to Intergraph this means that the entire Pentium family infringes its patents. Intel is naturally appealing the ruling, which was made as part of Intergraph's antitrust suit against the chip giant. This isn't actually scheduled to go to trial until February 14 next year, but in the meanwhile Intergraph seems to be getting the best of the skirmishing. The patent issue is one of numerous areas of dispute, and is fiendishly complicated, dating back over 20 years. Intel had argued that it had the rights to use Clipper technology for cache memory via a 1976 corss-licensing agreement with NatSemi. But Clipper's original developer was Fairchild. Both Intergraph and NatSemi bought into Fairchild in 1987. Intergraph was involved in talks to buy Fairchild's Advanced Microprocessor Division in September of that year, and said it had reached an agreement to transfer the division's assets, including Clipper patents, to Intergraph. But NatSemi bought a controlling stake in Fairchild the next month. According to Intergraph, at this point the division's assets went to Intergraph. According to the judge's ruling, this is correct. "The undisputed facts establish that NSC [NatSemi] had no legal authority to grant a license, as the patents at issue belonged not to NSC but to a legally distinct corporation - Fairchild," he says. "Intel thus never received a license from any entity with the power to grant one." In reply Intel argues that the judge is setting a new precedent for cross-licensing deals by saying that companies have to get their subsidiaries' permission before implementing them. That might be what he's saying, but we're not so sure. If there was an irrevocable deal to transfer Clipper to Intergraph before NatSemi bought Fairchild, then Clipper was not an asset that could be included in the NatSemi deal, and hence not covered by the 1976 cross-licence. We await the appeal with interest. ®

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