Patent Infringement Against Intel Upheld

Intel's request for a new trial in its dispute with Intergraph over Intel's Itanium processors has been denied, a decision that will cost Intel $150 million under a previous agreement and could result in more payments.

Intel had requested that Judge T. John Ward reconsider his October 10 finding in the case that Intel infringed upon "valid and enforceable" patents held by Intergraph for parallel instruction computing (PIC). The decision entitled Intergraph to an injunction against Intel banning the manufacturing, sale or distribution of 64-bit Itanium or Itanium 2 processors for servers.

Intel and Intergraph are currently negotiating the terms of the injunction and judgment that will be entered by Judge Ward this week, said Jeannie Robison, director of corporate public relations for Intergraph. After the judge enters that final ruling Intel will appeal to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., said Chuck Mulloy, an Intel spokesperson.

Long Battle

The two companies had previously agreed to a range for damages in the current PIC lawsuit, which was filed in July 2001. Intel said that if it lost the PIC case, it would pay Intergraph $150 million in liquidated damages, Mulloy said. The $150 million is due 30 days from the date of the final ruling from Judge Ward, Robison said.

Intel has three options in order to stay the injunction: appeal the decision, pay $100 million to license the relevant patents, or redesign the Itanium processor. If Intel wins on appeal, it is not responsible for any further payments, but if it loses, it must pay the $100 million to secure the patents, Mulloy said.

Intergraph and Intel's legal battles date back to 1997, when Intergraph sued the Santa Clara, California, chip maker after it claimed Intel demanded access to patented Intergraph technology in Intel's Pentium processors without having to pay royalties. Intergraph, based in Huntsville, Alabama, alleged that when it refused, Intel cut off access to high-end processors used by Intergraph in a line of workstations.

The two companies ended that litigation in April, when Intel agreed to pay Intergraph $300 million as part of a settlement and to purchase unrelated technology patents held by Intergraph.

Intel has not ruled out a design-around for the Itanium processor with its decision to appeal, Mulloy said.