Intel vs Via. Trumpets sound in battle of Jericho

How do cross patents save the big boys?

Analysis In the next week or so, Via, First International Corporation (FIC), KMS and Everex will have the chance to respond to litigation initiated by Intel. The Intel legal action focuses on allegations that the above companies have infringed on its patents. Via was sued earlier in the year by Intel over what is supposed to be a completely separate set of alleged patent infringements. However, there is still some mystery about whether Intel has a leg to stand on, particularly given that its legal department chose to single out this small clutch of companies and to ignore other vendors -- such as IBM and Compaq -- which also use Via technology in some of the machines they market. According to a source close to Intel (in fact from Intel in the US), the reason why his company is not sueing people such as Compaq and IBM is because there are cross licence agreements between the three parties which cover the big boys. It's very hard to get any further than that. When you ask Intel what the nature of these cross licences are that protect Big Blue and Big Q, the stock answer is that these details are confidential and cannot be disclosed. The argument is circular, and by the time you get round to the beginning again, your head is spinning from spin. On the face of it, Intel's argument does not appear to stack up. It's not just Compaq and IBM which use Via technology -- there's a whole heap of other second and third tier vendors also not named in the suit. FIC itself seemed puzzled by the legal action, quite plaintively hoping that its existing relationship with Intel would not be harmed during this process. Recent data published in Taiwan shows that AsusTek, Gigabyte, Microstar and the PC Chips group have the lion's share of motherboard production, collectively shipping 40 million units during this year, amounting to around 40 per cent of the total global market. FIC is no minnow, however, and OEMs motherboards for a number of large firms, including Compaq. According to a source close to FIC, the last thing Intel wants to do is to antagonise Compaq, because the Big Q would quite definitely stand up to Chipzilla in an out-and-out fight. That leads to the suspicion that Intel is using its considerable legal and financial muscle to make an example of the companies concerned, in the hope that it will warn off other firms that dare to dabble in the Via waters. In the equation, we must not forget the part AMD has to play as it begins to steadily nibble into areas of Intel's market that it has never tasted before. Via has consistently denied, and continues to deny, that any technology it produces infringes in any way on Intel patents. This looks like being a long and drawn out battle. ®