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Update! Report: AMD Says Intel is in Breach

By - Source: Tom's Hardware US | B 52 comments

[Updated--see foot note] Earlier today, we reported that Intel gave notice to AMD to rectify a situation with AMD's spinoff company, Globalfoundries. Intel not only filed complaint with AMD, but eventually sent a warning to AMD, indicating that if the situation isn't resolved, Intel would terminate a long-term intellectual agreement with AMD--essentially removing sanctions allowing AMD to engineer and produce x86 processors.

We spoke to AMD's Michael Silverman, and asked some questions. We asked AMD where it thinks Intel is wrong, and what would happen if Intel did go through with the termination. This is what AMD gave back to us:

"Intel’s action is an attempt to distract the world from the global antitrust scrutiny it faces. Should this matter proceed to litigation, we will prove that Intel fabricated this claim to interfere with our commercial relationships and thus has violated the cross-license," said Silverman, AMD public relations.

In fact, AMD has already filed with the SEC, claiming that it did not violate the original terms, and that if Intel did terminate, it would be the one breaching the original contract.

"AMD remains in full compliance with the cross-license agreement. And as we’ve stated all along, the structure of GLOBALFOUNDRIES takes into account all our cross-license agreements.  We will continue to respect Intel’s intellectual property rights, just as we expect them to respect ours," commented Silverman.

When we asked AMD about Intel's intentions, Silverman told us, "we believe that Intel manufactured this diversion as an attempt to distract attention from the increasing number of antitrust rulings against it around the world. With a ruling from the European Commission and a U.S. trial date looming, and investigations by the U.S. FTC and NY Attorney General, the clock is ticking on Intel’s illegal practices - and yet with its dominant monopoly position it still tries to stifle competitors."

Although Silverman did not comment on specifically on the aspects of ATIC, he mentioned that the two-way agreement benefits both companies, not just AMD. Silverman indicated that part of the license, also allows Intel to take advantage of patents belonging to AMD, specifically 64-bit architectures, integrated memory controllers and other technologies.
 
"The AMD/Intel cross-license agreement is a two-way agreement, the benefits of which go to both companies. Intel leverages innovative AMD IP critical for its product designs under the cross license.  This includes AMD patents related to 64-bit architecture extensions, integrated memory controller, multi-core architecture, etc.).  The cross-license is very much a two-way street," said Silverman.

Silverman concluded: "In fact, we informed Intel that their attempt to terminate AMD’s license itself constitutes a breach of the cross-license agreement, which, if uncured, gives AMD the right to terminate Intel’s license."

AMD's filing with the SEC, on March 11th, states the following:

The Company [AMD] 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 and licenses under the Cross License Agreement while retaining the Company's rights and licenses under the Cross License Agreement.

We are still waiting for an official response from Intel.

Update: We asked Intel if the original Reuters report on Intel terminating AMD's license to use x86 technologies was correct. Here is what Intel's Chuck Mulloy had to say:

Note quite right. We've given [AMD] 60 days to fix the issue or AMD's rights under the agreement are terminated. Not the agreement. Subtle but important differences.

It would mean that [AMD] don't have the right to sell or market x86 architecture products. In terms of customers, we would evaluate that but it's far too early. Remember, by sending the "breach" letter to AMD we are merely executing a dispute resolution process outlined in the agreement with AMD.

We're waiting on a response back from Intel on AMD saying that if Intel proceeds with the termination, AMD would also terminate Intel's rights to use 64-bit, integrated memory controller and other technologies that AMD licenses to Intel.

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Top Comments
  • 14 Hide
    mdillenbeck , March 16, 2009 8:12 PM
    I think we, the general public, have insufficient information to know what is the correct or legal outcome of this. We do not know the contract contents, and we do not know how AMD formed the new business.

    Considering the current negative perceptions against Intel, the level of civilian distrust of large corporations due to the economic crisis, and the various anti-trust accusations against Intel, this seems like a poor move by Intel. AMD will be able to portray itself as David standing off against Goliath and possibly gain sympathy from consumers, and Intel will seem like a monopolistic corporation trying to crush competition.

    I, like others, am glad to see that AMD is willing to fight against a corporation with vastly greater resources. Like others, I will be watching this closely as it will have a significant impact on the future of the CPU and PC market (even if it is a renegotiation of licensing agreement costs).
  • 10 Hide
    grieve , March 16, 2009 8:00 PM
    The only real winners here will be the Lawyers! $$$,$$$,$$$
  • 10 Hide
    anonymous_anonymous , March 16, 2009 7:16 PM
    I want both CEOs (AMD & INTEL) go at it in a box ring with bare-knuckles. That would be sweet!!!
Other Comments
    Display all 52 comments.
  • 7 Hide
    thedipper , March 16, 2009 6:56 PM
    This is getting so exciting.
  • 6 Hide
    Tedders , March 16, 2009 7:08 PM
    Go get em AMD!!
  • 2 Hide
    jonpaul37 , March 16, 2009 7:08 PM
    no it's not, these are sad times, the economy is horrible and what do people do? point fingers at one another, there is no hope left for human kind...
  • 7 Hide
    Tedders , March 16, 2009 7:10 PM
    Jonpaul37no it's not, these are sad times, the economy is horrible and what do people do? point fingers at one another, there is no hope left for human kind...

    Would you rather AMD just sit back and watch it happen? Then things would be even worse.
  • 10 Hide
    anonymous_anonymous , March 16, 2009 7:16 PM
    I want both CEOs (AMD & INTEL) go at it in a box ring with bare-knuckles. That would be sweet!!!
  • -1 Hide
    macer1 , March 16, 2009 7:23 PM
    Jonpaul37 do us a favor and fall on something sharp.....

    that type of thinking is what WONT lead us out of this economic downturn.....


    GO AMD
  • -1 Hide
    thedipper , March 16, 2009 7:26 PM
    People in the tech industry aren't exactly feeling a very bad economy. That's a strong generalization of course, but I can't remember any IT personnel complaining about not being able to buy the latest in CPU technology.
  • -2 Hide
    anonymous_anonymous , March 16, 2009 7:30 PM
    anonymous_anonymousI want both CEOs (AMD & INTEL) go at it in a box ring with bare-knuckles. That would be sweet!!!


    I meant to say boxing ring, but it should definetely be bare-knuckle boxing match. Go AMD and the rest of you "DUDE, YOU GOT A DELL POS!!"
  • -1 Hide
    tenor77 , March 16, 2009 7:42 PM
    AMD says "I'm rubber you're glue"
  • -9 Hide
    Anonymous , March 16, 2009 7:43 PM
    AMD is being ridiculous in that they seem to be counting on public "pro-underdog" sentiment and lawsuits, rather than faster and better processors to compete for market share with Intel. In short they haven't recently built competitive processors, so they opt to compete by dragging Intel through the PR mud, and trying to take cash from them and gain market share through the courts.

    Intel on the other hand does appear to have pulled some pretty dirty and probably illegal tricks with regards to OEMs, and that is under investigation in the EU and US. What a stupid time for a company that is accused of anti-trust violations to seek to kill the license of a competitor, even if the competitor is in breach it might not be too bright of a move.

    But a contract is a contract. Each side should be forced to live up to the very things they themselves agreed to in the contract, PR campaigns and public sentiment notwithstanding. If contracts can be violated because one signatory can drum up enough negative sentiment about the other, then the whole system comes crashing down and becomes PR based, not law based.
  • 10 Hide
    grieve , March 16, 2009 8:00 PM
    The only real winners here will be the Lawyers! $$$,$$$,$$$
  • 8 Hide
    eddieroolz , March 16, 2009 8:05 PM
    That's it. My next processor's an AMD.
  • -2 Hide
    lejay , March 16, 2009 8:11 PM
    And ARM
  • 5 Hide
    PrangeWay , March 16, 2009 8:11 PM
    if both licesnes terminate intel will have to stop production of all i7/i5's and all future chips with 64bit or integrated memory controllers? Big game of chicken here. Intel is defefinetly heading down the "hubris" path, and that almost alwasy ends up with you getting smacked by the anti-monopoly stick.
  • 14 Hide
    mdillenbeck , March 16, 2009 8:12 PM
    I think we, the general public, have insufficient information to know what is the correct or legal outcome of this. We do not know the contract contents, and we do not know how AMD formed the new business.

    Considering the current negative perceptions against Intel, the level of civilian distrust of large corporations due to the economic crisis, and the various anti-trust accusations against Intel, this seems like a poor move by Intel. AMD will be able to portray itself as David standing off against Goliath and possibly gain sympathy from consumers, and Intel will seem like a monopolistic corporation trying to crush competition.

    I, like others, am glad to see that AMD is willing to fight against a corporation with vastly greater resources. Like others, I will be watching this closely as it will have a significant impact on the future of the CPU and PC market (even if it is a renegotiation of licensing agreement costs).
  • 2 Hide
    IzzyCraft , March 16, 2009 8:20 PM
    When i see anti trust all i think about is the Australian Internet and go so?
  • -1 Hide
    IzzyCraft , March 16, 2009 8:26 PM
    Also if i remember history right ibm contacted amd to produce intel chips same chips different names as to spur competition amd has since made us believe then terribly failed us in that it can be considered real competition with intel.

    Either way this squabble will hopefully just end without any real recourse against either company.
  • 2 Hide
    deltatux , March 16, 2009 8:26 PM
    If Intel pulls AMD the license from being allowed to produce x86 processors. There goes the whole Nehalem architecture and most of the Core 2 line of processors since they require AMD licenses to operate.

    It's going to spell disaster for both companies and throw back years of innovation. It is definitely not a wise choice especially with the current economic environment.
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