Court Revokes AMD Rights to 386 Technology : Computers: The decision opens the way to further litigation between Advanced Micro Devices and Intel Corp.
In a decision that could have severe financial implications for chip maker Advanced Micro Devices, a state appeals court has overturned an arbitrator’s award that gave AMD the technology rights to archrival Intel Corp.’s 386 microprocessor.
The unexpected reversal will have no immediate impact, but it opens the way for Intel to proceed with a copyright-infringement claim against AMD over AMD’s use of Intel software, known as microcode, in its clones of Intel 386 chips.
The Intel 386, introduced in 1986, for some years was the industry’s cutting-edge microprocessor for IBM-type PCs. Though it has since been surpassed by the 486 and other chips, it remains the most widely used PC microprocessor. AMD began selling a 386 clone in 1991 and has come to dominate a market Intel once had to itself.
If Intel is able to prove in court that AMD does not have the right to use its microcode, it could then seek to recover profit it claims to have lost as a result of AMD’s entry into the 386 market.
Intel previously estimated the lost profit at $600 million, but F. Thomas Dunlap, Intel’s general counsel, said Saturday that AMD has been more successful than expected in the 386 business and that the $600-million figure is too low.
The two companies are already fighting the issue in court because AMD also uses the microcode in other products, including its recently released 486 clone. A federal judge threw out a jury verdict that favored Intel and ordered a new trial on the issue, enabling AMD to launch its 486.
The microcode litigation had not been expected to affect the 386, because an arbitrator charged with resolving a complex dispute over a 1982 technology-sharing agreement had granted AMD rights to any Intel technology used in the 386. That decision came as a kind of compromise after the arbitrator found fault with both companies’ actions.
A Santa Clara County Superior Court judge had confirmed the arbitration award, but the Court of Appeals, in its decision Friday, agreed with Intel that the arbitrator exceeded his powers by fashioning a remedy for AMD that went beyond the scope of the original arbitration agreement. The appellate court reversed the Superior Court’s confirmation of the award.
AMD said it will take the matter to the state Supreme Court if the appeals court does not reconsider its decision. It also expressed confidence that the reversal will not stand.
“This decision gutted the remedy for Intel’s wrongdoing, and in doing so gutted the arbitration process,” Thomas Armstrong, AMD vice president and general counsel, said in a statement.
