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Intel to AMD: Your x86 License Expires in 60 Days

By - Source: Tom's Hardware US | B 77 comments

Intel this week announced that it would terminate AMD's license to produce x86 processors due to AMD's spinoff company, Globalfoundries.

AMD spun off its manufacturing division and would thereby use the new company to manufacture its own products as well as possibly products from other companies. Due to dwindling financial performance, this was something that AMD deemed necessary. However, Intel said that because the spinoff isn't a subsidiary of AMD, it does not confirm to the license agreement Intel signed with AMD in 2001--the license doesn't automatically transfer to a spinoff company.

From Intel's press release:

Intel Corporation today disclosed that the company has notified Advanced Micro Devices (AMD) that it believes AMD has breached a 2001 patent cross-license agreement with Intel. Intel believes that Global Foundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. Intel also said the structure of the deal between AMD and ATIC breaches a confidential portion of that agreement. Intel has asked AMD to make the relevant portion of the agreement public, but so far AMD has declined to do so. AMD's breach could result in the loss of licenses and rights granted to AMD by Intel under the agreement.

AMD filed with the U.S. Securities and Exchange Commission, saying that it did not breach any contractual or intellectual agreement with Intel, and based on the original contract, Intel does not have the right to terminate the contract. Intel, argues otherwise. Representatives from Intel said that Globalfoundries is a joint venture with several other companies, including Advacned Technology Investment Co (ATIC), and ATIC does not have a license agreement with Intel.

"AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent," said Bruce Sewell, Intel's general counsel.

Essentially, Globalfoundries allows ATIC to manufacture x86 processors and chipsets. If Intel does go through with the x86 license termination, this would spell big trouble for AMD. Many large OEMs rely and buy from AMD, and if the contract terminated, it would allow Intel to legally go after companies still buying x86-based AMD processors.

AMD has 60 days to comply with Intel before Intel terminates the x86 contract.

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  • 0 Hide
    grieve , March 16, 2009 6:10 PM
    I apologize for my ignorance... what patent are we talking about here which Intel has that AMD requires licensing?
  • 0 Hide
    Hellbound , March 16, 2009 6:10 PM
    Something tells me Intel wants AMD out of the way.
  • 3 Hide
    maaksel , March 16, 2009 6:15 PM
    What is with Intel lately?
  • 0 Hide
    The_Blood_Raven , March 16, 2009 6:17 PM
    Now I usually scoff at people calling Intel evil, but this is about as evil as it gets. I hope the government steps in and bitch slaps Intel, they are trying for a total monopoly of modern CPUs, that is ILLEGAL!
  • 4 Hide
    jhansonxi , March 16, 2009 6:18 PM
    This will be an interesting battle to watch. Without the x86 patents AMD is stuck being a video and chipset company in the PC world. It also means that Intel is back to monopoly status. Even if you prefer Intel CPUs the presence of AMD in the market helps keep their prices low.
  • 3 Hide
    frozenlead , March 16, 2009 6:19 PM
    Since Intel would be the only major x86 processor producing company, couldn't that be considered a monopoly and be subject to anti-trust filings, which would probably reinstate AMD's x86 license?
  • 3 Hide
    SAL-e , March 16, 2009 6:19 PM
    Now, how the patent system promotes the progress in this case?!
  • 5 Hide
    jacobdrj , March 16, 2009 6:22 PM
    The real question is: How is it that people/corporations are allowed to keep their patents after 13ish years, if the whole point is to 'make your profit, and then benefit humanity'. Same goes for copyrights. Make your money, and then it is public knowledge.
    I guess the Constitution is just sort of a set of 'guidelines'.
  • 1 Hide
    Anonymous , March 16, 2009 6:29 PM
    "I apologize for my ignorance... what patent are we talking about here which Intel has that AMD requires licensing?"

    Intel designed and owns the rights to the x86 instruction set. AMD has always been a licensee (due to insistence by IBM on having multiple suppliers). VIA and a couple of other companies also hold licenses from Intel. I believe some of the design of the current x64 standard were AMDs, thus the cross licensing. Maybe I'm wrong about what AMD licenses Intel has in return.
  • 5 Hide
    HermDawg , March 16, 2009 6:31 PM
    How will it work with x86-64 licensing? Intel licenses that technology from AMD. If Intel revokes x86 from AMD then AMD would probably revoke x86-64 from Intel. Then all we'd be left with would be 32 bit Intel processors. I really don't think it's Intel's intentions to revoke the x86 license. They probably have some other motive behind this.
  • 3 Hide
    hellwig , March 16, 2009 6:33 PM
    grieveI apologize for my ignorance... what patent are we talking about here which Intel has that AMD requires licensing?

    I had the same question when there was talk about Nvidia building an x86 CPU and requiring a license from Intel. As far as I can tell, Intel's patents only go back to the Pentium and more recent extensions (like SSE and 3dNow, or was that AMD?). The actual x86 architecture should be out of patent by now (the 486 expired or does expire sometime this year).

    Considering AMD created the modern 64-bit architecture (Intel/EMT 64 is a licensed version of AMD64), I doubt Intel has much clout anymore. Intel can whine and complain all they want, but the truth is the x86 (x64) processor we know today is a combination of AMD and Intel technology. I really don't see how Intel thinks it can continue developing its own processor line without AMD anymore.
  • -7 Hide
    tenor77 , March 16, 2009 6:37 PM
    The constitution doesn't apply here. Nothing about the patent system in there.

    Anyway this is junk and nobody but intel would benefit from this. My guess is that Uncle Sam will step in on this one.
  • 3 Hide
    buzznut , March 16, 2009 6:38 PM
    Well I am a big AMD fan, but this actually looks like Intel has a case. This statement sounds as though Intel has a legitimate claim.

    "AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent," said Bruce Sewell, Intel's general counsel."

    My guess is AMD will be forced to cough up some money (probably from the shootoff) to extend the license.
  • 4 Hide
    hellwig , March 16, 2009 6:39 PM
    HermDawgHow will it work with x86-64 licensing? Intel licenses that technology from AMD. If Intel revokes x86 from AMD then AMD would probably revoke x86-64 from Intel. Then all we'd be left with would be 32 bit Intel processors. I really don't think it's Intel's intentions to revoke the x86 license. They probably have some other motive behind this.


    Intel might be trying the old Microsoft method. Get into license agreements with competitors, then use a bunch of legal handwaving to invalidate the agreement, but keep the competitors technology, then undersell and eliminate. Intel might be trying to keep the 64-bit technoloy while eliminating competition from AMD. I seriously doubt they could get away with such an action in today's market.

    More likely, Intel is just trying to get more money out of AMD. The two companies will be forced to work this out, and in the end, AMD might have to buy into a new agreement. Intel has been complaining about reduced computer sales. They are probably looking to ride atop the bad economy using Nvidia's and AMD's money. These licensing battles are just a ploy to prevent losing any market share without gaining some sort of benefit in return.
  • 0 Hide
    buzznut , March 16, 2009 6:41 PM
    or possibly reach an agreement otherwise regaarding the x64
  • 2 Hide
    SAL-e , March 16, 2009 6:46 PM
    tenor77The constitution doesn't apply here. Nothing about the patent system in there.

    Re-post from other thread found here: http://www.tomshardware.com/news/microsoft-surface-patent-10000-us,7004.html

    nottheking is correct. There is no mention of the patents and copyright in the US Constitution. To bad I trusted sources like Abraham Lincoln:

    "Next came the Patent laws. These began in England in 1624; and, in this country, with the adoption of our constitution. Before then [these?], any man might instantly use what another had invented; so that the inventor had no special advantage from his own invention. The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things."
    Abraham Lincoln

    I had to do some searching and asking questions around here is what I found out:

    Article 1, Section 8, clause 8 of the US Constitution says,
    “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”

    So looks like the copyright and patent supporters are correct that US Constitution provide bases for their claims, but I was wandering how the people who wrote the US Constitution will react, if they can see the results today. And I'm not the only one:
    Constitutional Sanction
    Mythologising Copyright
    The last two links a discussions about copyrights, but I think the same arguments (pro and con) can be made for patents.
  • -2 Hide
    MosportMike , March 16, 2009 6:47 PM
    It all boils down to Intel knowing AMD is soon going to catch, then surpass everything Intel has. AMD is back and last quarter they gained market share and Intel doesn't want that to happen. Intel knows that AMD will mass produce with big yields so they can sell cheap.
  • 3 Hide
    hellwig , March 16, 2009 6:49 PM
    captaincharisma A.M.D. should have tried to create there own CPU from the beginning instead of paying Intel loads of cash so they can make the same kind of CPU

    You obviously don't know the history of AMDs x86 production. IBM forced Intel to license the technology to AMD because IBM has a rule that it have two sources for any component.

    Not only that, but since the days of the AMD K6-2, AMD has been creating its own extensions to the x86 architecture. Modern AMD and Intel CPUs are very similar (thats why you don't need different versions of Windows or Linux). If Intel built a CPU without any AMD technology in it, you'd probably be stuck with a Pentium II.

    I'm not saying AMD didn't breach any agreement between the two companies, I'm just saying Intel can't say it owns all of x86 in general. It lost its stranglehold on that market a long time ago. If you like having more than 4GB of memory in your PC, you can thank AMD for that (or use Intel's wonderful (sarcasm) Itanium architecture).
  • -4 Hide
    werepossum , March 16, 2009 6:50 PM
    Intel is completely in the right as far as I can see, but since we don't know exactly what the contract says . . .

    This could spell the end of legacy software and, at worst, two different versions of Windows, with AMD using complete true 64 bit code and a bunch of new commands. It could also mean huge monopoly taxes on Intel as our government looks for new piles of cash to seize. And it could mean significant disruption in the computer market at a very difficult time, which might push some marginal companies over the edge.

    I don't think Intel means to prohibit AMD from making X86 chips, though, especially given that Apple now uses Intel chips. More likely by far is that Intel wants to write a new, much more lucrative license agreement that would keep AMD in the X86 market, but without the R&D budget to be a serious competitor on innovation and performance. This isn't the first time Intel has declared the X86 licensing agreement void.
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