Intel's X86 license with AMD questioned

[thilanliyan]

http://www.dailytech.com/article.aspx?newsid=14588

 

[richierich1212]

Intel, the big bad bully

 

[OCGuy]

Originally posted by: richierich1212
Intel, the big bad bully

Agreements are agreements. If it really does violate it (which will ultimatly be decided in court, I would think), then they need to reach a new one. That isnt being a "bully".

 

[richierich1212]

Originally posted by: Ocguy31

Originally posted by: richierich1212
Intel, the big bad bully

Agreements are agreements. If it really does violate it (which will ultimatly be decided in court, I would think), then they need to reach a new one. That isnt being a "bully".

They also filed a lawsuit against Nvidia recently.

 

[OCGuy]

Originally posted by: richierich1212

Originally posted by: Ocguy31

Originally posted by: richierich1212
Intel, the big bad bully

Agreements are agreements. If it really does violate it (which will ultimatly be decided in court, I would think), then they need to reach a new one. That isnt being a "bully".

They also filed a lawsuit against Nvidia recently.

Which means what? You cant have 2 valid complaints against two different companies at the same time? (Im not saying either is valid, that is what the courts are for).

 

[nyker96]

i don't think it's in intel's best interest to get rid of all competition in the microprocessor sector. that might leave itself in the field a sure anti trust issue for them.

 

[Idontcare]

Intel claims that in response to the material breach notification it sent out, AMD claimed Intel breached the agreement by notifying AMD of its breach.

AMD defended itself, with Harry Wolin, AMD's Senior Vice President and General Counsel, stating that Intel's unilateral "purported attempt to terminate the Company?s rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel".

That's it!? That's AMD's defense? I have a sick feeling in the pit of my stomach that AMD is taking legal counsel from the law offices of Larry, Curly, and Moe.

 

[AstroManLuca]

Not to mention Intel themselves are relying on AMD for x86-64.

 

[bfdd]

Originally posted by: AstroManLuca
Not to mention Intel themselves are relying on AMD for x86-64.

But since x86-64 is an instruction set based on x86, doesn't Intel have legal rights to use it since AMD was only able to develop it because they were licensing x86 from Intel?

 

[heyheybooboo]

Originally posted by: Idontcare

Intel claims that in response to the material breach notification it sent out, AMD claimed Intel breached the agreement by notifying AMD of its breach.

AMD defended itself, with Harry Wolin, AMD's Senior Vice President and General Counsel, stating that Intel's unilateral "purported attempt to terminate the Company?s rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel".

That's it!? That's AMD's defense? I have a sick feeling in the pit of my stomach that AMD is taking legal counsel from the law offices of Larry, Curly, and Moe.

:laugh:

Or Intel's legal counsel from Dewey, Cheatum & Howe.


Hard to see either one of them getting out of this without looking like a couple of whiny teenage girls (sorry, ladies). I propose a drinking match between CEOs to settle this thing.

 

[AstroManLuca]

Originally posted by: bfdd

Originally posted by: AstroManLuca
Not to mention Intel themselves are relying on AMD for x86-64.

But since x86-64 is an instruction set based on x86, doesn't Intel have legal rights to use it since AMD was only able to develop it because they were licensing x86 from Intel?

I don't think so. IANAL, but I believe the most Intel could do would be to halt AMD's production of x86 CPUs. Since x86-64 is a superset of x86, this would lead to a total production halt. By the same token, AMD could stop Intel from producing x86-64 CPUs (but not x86-only ones).

The point is that the best course of action for both companies is to back down.

 

[zsdersw]

Originally posted by: AstroManLuca
Not to mention Intel themselves are relying on AMD for x86-64.

For AMD's version of x86-64. Intel has their own they could use.

 

[AstroManLuca]

Originally posted by: zsdersw

Originally posted by: AstroManLuca
Not to mention Intel themselves are relying on AMD for x86-64.

For AMD's version of x86-64. Intel has their own they could use.

True, but it would still be a PITA for them to switch all their stuff over to it. But I guess not as much of a PITA as AMD not being able to produce x86 CPUs.

 

[exar333]

Originally posted by: AstroManLuca

Originally posted by: bfdd

Originally posted by: AstroManLuca
Not to mention Intel themselves are relying on AMD for x86-64.

But since x86-64 is an instruction set based on x86, doesn't Intel have legal rights to use it since AMD was only able to develop it because they were licensing x86 from Intel?

I don't think so. IANAL, but I believe the most Intel could do would be to halt AMD's production of x86 CPUs. Since x86-64 is a superset of x86, this would lead to a total production halt. By the same token, AMD could stop Intel from producing x86-64 CPUs (but not x86-only ones).

The point is that the best course of action for both companies is to back down.

AMD would have no legal ground to stand on to halt licensing of x86-64. If Intel wins, they get to take their toys and go home, but they get to keep AMD's as well. If this happens, then AMD is toast anyway.

Don't expect anything to happen any time soon, this will likely take years to resolve.

 

[bfdd]

Exar, that's kind of what I was getting at. Since x86-64 is based on x86. How can AMD take it away from Intel since they never would of been able to develop it if it wasn't for the license that AMD had from Intel. Meaning any developments on their platform would still technically be theirs? If not then Intel is stupid

 

[Soulkeeper]

Edit: oops wrong thread ...

 

[AnandThenMan]

AMD would have no legal ground to stand on to halt licensing of x86-64. If Intel wins, they get to take their toys and go home, but they get to keep AMD's as well. If this happens, then AMD is toast anyway.

It is hardly as cut and dry as you try to make it seem. I hope you are not considering going to law school.

AMD holds quite a few patents itself, for example patents relating to multi-core x86, integrated memory controllers, and of course x86-64. Intel cannot just unilaterally force AMD to stop production and walk away without any implications of their own.

 

[Idontcare]

Originally posted by: AnandThenMan

AMD would have no legal ground to stand on to halt licensing of x86-64. If Intel wins, they get to take their toys and go home, but they get to keep AMD's as well. If this happens, then AMD is toast anyway.

It is hardly as cut and dry as you try to make it seem. I hope you are not considering going to law school.

AMD holds quite a few patents itself, for example patents relating to multi-core x86, integrated memory controllers, and of course x86-64. Intel cannot just unilaterally force AMD to stop production and walk away without any implications of their own.

For the folks in this thread who are enticed to think along these lines that this is a MAD (mutually assured destruction) situation for both parties I remind you that the terms of the cross-license contracts are intentionally scripted as to allow the offended party (Intel claims to be the offended party here) continued uninterrupted access to the IP as negotiated under the terms of the contract.

It is only the party in breech of the contract (Intel claims AMD has breached the contract) which loses the right to produce/sell products containing the cross-licensed IP.

This is why you see AMD's first reaction to be the claim that Intel is the offender and they are in breech, if it is true then Intel gets locked out of the IP in the cross-license but not AMD.

From what we know of the 20% clause in AMD's cross-license agreement with Intel it would appear that the odds are high that this is not a frivolous claim by Intel and that there is likely some merit to their claims.

To be sure AMD is withholding the details of their business agreement with GlobalFoundries as a means to prevent some manner of competitive info coming to the public arena, and no one in business ever hides good news, ever.

 

[exar333]

Originally posted by: AnandThenMan

AMD would have no legal ground to stand on to halt licensing of x86-64. If Intel wins, they get to take their toys and go home, but they get to keep AMD's as well. If this happens, then AMD is toast anyway.

It is hardly as cut and dry as you try to make it seem. I hope you are not considering going to law school.

AMD holds quite a few patents itself, for example patents relating to multi-core x86, integrated memory controllers, and of course x86-64. Intel cannot just unilaterally force AMD to stop production and walk away without any implications of their own.

You sir are completely wrong. This is EXACTLY what Intel's goal is. No law school for me, and you appear to be such a great candidate....*sarcasm*

Are you really suggesting that Intel would file this lawsuit knowing it would hurt them? Riiiiight. That would be the dumbest lawsuit ever.

 

[SickBeast]

Alot of people were quesioning this stuff when AMD announced the foundry spinoff.

The thing is, AMD has intel by the balls in their own way. If AMD goes broke, then Intel becomes a monopoly and has to deal with the SEC. People say that it is in intel's best interest to keep AMD on life support as a very weak competitor with say 10% marketshare just to keep the SEC satisfied. Otherwise it will all go to lawyers and the government.

 

[DrMrLordX]

Intel's lawyers must have already thought that one through. Technically I do not think Intel can be challenged under anti-trust because they have "competition" from VIA, China (Longsoon 2), and other bit players.

If Intel actually feared anti-trust, you would think they would hold the entire matter over AMD's head and use it as a thinly-veiled potential threat so as to contain their behavior. As it stands, it looks like Intel is going for the throat.

How this all intertwines with AMD's long-running lawsuit against Intel for anti-competitive practices back in the P4 days is anyone's guess.

 

[AnandThenMan]

Originally posted by: ExarKun333
You sir are completely wrong. This is EXACTLY what Intel's goal is. No law school for me, and you appear to be such a great candidate....*sarcasm*

You forgot to use your brain again before you used your keyboard.

Are you really suggesting that Intel would file this lawsuit knowing it would hurt them? Riiiiight. That would be the dumbest lawsuit ever.

Intel is going after AMD to throw a wrench in AMD's spinoff plans. They want to seed doubt into the market that AMD just might lose their X86 license. No one wants to deal with a company might lose their processor business over a legal matter. Sure, some will not buy it, some will, some may be apt to pause and consider the implications.

Either way, Intel accomplishes what it wants. Typical tactics of Intel to be sure. Intel also is desperate to make sure AMD cannot mint X86 chips through some loophole for other companies. The bottom line is Intel will do literally anything to protect their IP.

BTW, if you had used your expert legal mind to understand the cross-license agreement, you would realize that the agreement calls for each party to use specific legal channels to make complaints. There is an "escelating" procedure that is required for disrupts such as this. Intel by the looks did not use this procedure (it will take time) and it is possible that by not using the contractual dispute procedure, they themselves may be in breach.

9.9. Dispute Resolution. All disputes arising directly under the express
------------------
terms of this Agreement or the grounds for termination thereof shall
be resolved as follows: First, the senior management of both parties
shall meet to attempt to resolve such disputes. If the senior
management cannot resolve the disputes, either party may make a
written demand for formal dispute resolution. Within thirty (30)
days after such written demand, the parties agree to meet for one
day with an impartial mediator and consider dispute resolution
alternatives other than litigation. If an alternative method of
dispute resolution is not agreed upon within thirty (30) days after
the one-day mediation, either party may begin litigation
proceedings.

Below is the requirement AMD needs to meet to satisfy the AMD/Intel agreement. Whether or not AMD has met these conditions is a matter of question. But Intel cannot just demand out of nowhere that AMD stop producing processors without adhering to the same terms of the agreement they claim AMD has breached. It is also false that Intel automatically owns any IP that AMD has in respect to X86. AMD owns X86-64, and under the cross licensing terms, Intel is free to use said technology with their own implementation. Each if free to produce processors that are compatible with one anothers instruction set without fear of legal challenges. AMD has many patents related to X64, just as Intel obviously has for X86.


1.22. "Subsidiary" shall mean any corporation, partnership, joint venture, limited liability or other entity, now or hereafter, in which a party

1. owns or controls (either directly or indirectly) or originally contributed (either directly or indirectly) at least fifty percent (50%) of the tangible and intangible assets of such entity; and
2. owns or controls (either directly or indirectly) either of the following:
1. if such entity has voting shares or other securities, at least fifty percent (50%) of the outstanding shares or securities entitled to vote for the election of directors or similar managing authority and such entity is under no obligation (contractual or otherwise) to directly or indirectly distribute more than seventy percent (70%) of its profits to a third party, or
2. if such entity does not have voting shares or other securities, at least fifty percent (50%) of the ownership interest that represents the right to make decisions for such entity and an interest sufficient to receive at least thirty percent (30%) of the profits and/or losses of such entity.
3. An entity shall be deemed to be a Subsidiary under this Agreement only so long as all requisite conditions of being a Subsidiary are met.

 

[AnandThenMan]

It turns out that AMD is in fact the one that has filed an 8-K form with the SEC.

If I understand this correctly, AMD has initiated the "escalated procedure" not Intel. Either way, the contract is specific and requires this procedure to take place, where the final judgment on who is in breach will be decided in court. No such case has taken place, so Intel cannot stop AMD from doing anything until it does.

http://idea.sec.gov/Archives/e...19312509054552/d8k.htm

Advanced Micro Devices, Inc. (the ?Company?) has received correspondence from Intel Corporation (?Intel?) related to the 2001 Patent Cross License Agreement between the Company and Intel (the ?Cross License?). In this correspondence, Intel (i) alleges that the Company has committed a material breach of the Cross License through the creation of the Company?s GLOBALFOUNDRIES joint venture and (ii) purports to terminate the Company?s rights and licenses under the Cross License in 60 days if the alleged breach has not been corrected.

The Company strongly believes that (i) the Company has not breached the terms of the Cross-License and (ii) Intel has no right to terminate the Company?s rights and licenses under the Cross License. Under the terms of the Cross License, there is an escalating procedure for resolving disputes, and the Company has commenced the application of that procedure with respect to Intel?s purported attempt to terminate the Company?s rights and licenses under the Cross License. In addition, the Company has informed Intel that the Company maintains that Intel?s purported attempt to terminate the Company?s rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel which gives the Company the right to terminate Intel?s rights and licenses under the Cross License Agreement while retaining the Company?s rights and licenses under the Cross License Agreement.

edit - to make sense of the last part. It essentially means that in the agreement, it is stated that if either party does NOT use the correct dispute procedure, then the party that did not adhere to the procedure, is in fact in breach of the agreement. And being in breach, in this case would mean Intel loses the right to use AMD tech, but AMD does not lose the rights to use Intel tech.

Again, all of this is subject to legal wrangling, and if need be decided in court. It is not something that can be arbitrarily decided by either party just because they say so.

Here is an actual lawyer who weighs in on the subject

It would take at least three years for Intel to get a court order to force AMD to stop making processors, according to Mark Walters, a patent lawyer in the Seattle office of Darby & Darby PC.

 

[heyheybooboo]

But AMD argues that its spin-off of Global Foundries doesn't violate what appears to be the key clause in the 2001 contract, Clause 1.22, which states that patents may be shared with subsidiary companies, provided the subsidiary satisfies two requirements:

* It owns, controls or originally contributed (either directly or indirectly) at least 50% of the tangible and intangible assets of the subsidiary.

* Through voting shares or seats on the board, it has 50% control of the subsidiary and also gets at least 30% of the profits and losses.

Per the TFC agreement it looks like AMD has equal control over the seating of directors (but not an equal split of profits). Because of the drop in stock price AMD share of profits in TFC has dropped from 44%+ to 34%+.

It looks to me if Chipzilla opens a can of Whoop-Arse over TFC they become a sitting duck before the courts in the 2005 anti-trust litigation PLUS takes the chance that their use of the IP/license in this manner 'enables unfair competition' over AMD.

AMD (with less than clean hands) pokes them with a stick by holding back some insignificant info and Intel feels like they have to respond with litigation - on the surface looks to reinforce AMD's evidence of 'monopolistic claims' in the 2005 anti-trust litigation - but in reality is little more than a legal 'rope-a-dope' by AMD.

 

[imported_Asianman]

I do believe Intel's intention is not to revoke its license with AMD, as AMD could revoke its licenses with intel as well, forcing Intel to redevelope the X64 stuff they abandoned because AMD came up with a more sucessful solution. Intel has the most to gain however, if they do what I think they are trying to achieve, to make AMD take a controlling share of globla foundries. Intel is arguing that AMD does not have the controlling shares and is therefore, disclosing the X86 instructions to global foundries.

Amd needs to strike back at this, they can't afford global foundries, they can't afford all the extra expenses, nor can they afford to loose the X86 instruction set. However, Intel is unlikely to revoke AMD's license and it most likely will end up with a renewed license agreement