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Intel and AMD Settle Antitrust, Patent Lawsuits

Posted by Soulskill on from the mr.-otellini-tear-down-that-wall dept.

Kohenkatz writes "Intel has agreed to pay $1.25 billion to AMD. In return, AMD will drop its lawsuits about patent and antitrust complaints. The two companies released this joint statement: 'While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.' The press release also says, 'Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement,' and that 'Intel and AMD will give up any claims of breach from the previous license agreement.'"

12 of 165 comments (clear)

  1. Only $1.25 Billion? by mantis2009 · · Score: 5, Insightful

    Seriously, this number seems low to me. The pending suits against Intel alleged that for a decade Intel conspired to freeze AMD out of the market. Intel poisoned nearly all of AMD's potential customers. Surely that cost AMD a lot more than just a billion or so dollars in lost revenue.

    1. Re:Only $1.25 Billion? by brxndxn · · Score: 5, Insightful

      As an AMD shareholder and an enthusiast who has followed this 'case' since 1999, I also think this settlement is low. I do not believe $1.25billion could bump AMD to a cash position of where it would have been if Intel had not competed unfairly. Yes, it is a $1.25billion injection of direct profits to AMD - but the cashflow through the company over the years from the marketplace to R and D would have put AMD in a much more competitive position.

      --
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    2. Re:Only $1.25 Billion? by Moridin42 · · Score: 5, Insightful

      Except that this is 1.25 billion dollars that AMD need make no sale to acquire. No materials costs, no QC costs. No manufacturing losses. Why should AMD (or anyone else) be concerned with revenues lost? They're only a way to secure profits. This is much closer to a billion dollars of profits, which is far more valuable than a billion dollars of revenue.

      --
      I don't expect morality, equality, consistency, or justice from the law. I expect only legality.
    3. Re:Only $1.25 Billion? by TheNinjaroach · · Score: 5, Insightful

      I just hope that it means we get to see some chips from AMD that once again provide a much better performance/cost ratio than the Intel chips.

      AMD processors are still beating Intel in the performance/cost ratio. They have been falling behind Intel on performance benchmarks alone, but the cost is cheap enough to make AMD a clear winner when comparing performance and cost.

      I'm looking forward to the time where they once again provide better performance than Intel while also toting a cheaper price tag.

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    4. Re:Only $1.25 Billion? by Enderandrew · · Score: 4, Insightful

      Not to mention Intel has already been found guilty in other countries. I think that Intel had good reason to suspect the same might happen in the US. Intel did get off light.

      I assume AMD took the deal because they have been hemmoraghing money for some time now. They needed a cash influx and couldn't afford to fight a legal battle much longer.

      The sad thing here is that the end lesson is that illegal, anti-competitive practices can be quite beneficial. The US government overlooked them, even when a bevy of vendors testified on AMD's behalf, despite Intel threatening those vendors. Intel profitted not only in the immediate dollar sense, but also in gaining massive market share.

      Yet the US threatened to go after Google if they had a search partnership with Yahoo. That is an evil monopoly that must be quashed (but it would be fine if Microsoft purchased Yahoo, swallowed their services, and removed choice and competition from the marketplace). None of this makes much sense.

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    5. Re:Only $1.25 Billion? by Hal_Porter · · Score: 2, Insightful

      Possibly; however, if it ever came down to an all-out litigious patent war, AMD may well have come out on top thanks to holding the rights to the x86-64 instruction set.

      Actually no. Intel sued AMD for patent infringement and the case was settled back in 1995. The end result of that was patent cross licensing but the agreement was asymmetric. AMD have to pay Intel a license fee for all the Intel patents they use but Intel does not have to pay AMD.

      http://news.zdnet.co.uk/hardware/0,1000000091,39146227,00.htm

      Because of the details of a lengthy 1995 legal settlement between Intel and AMD, Intel can in all probability create and sell chips that are completely compatible with AMD's Opteron and Athlon 64 chips, which can run both 32- and 64-bit software, according to the companies and legal experts. Intel won't even have to pay AMD royalties if it incorporates ideas from any AMD patents into its chips.

      "My understanding, based on the licensing agreement, is that Intel has access to AMD's patents so patent protection should not be a problem," said Richard Belgard, a noted patent consultant.

      Intel may have to rename some of the instructions, or commands, embedded in any chip that is similar to Opteron, but "the code can be 100 percent compatible," Belgard added.

      Though Intel spokesman Chuck Mulloy declined to comment on whether or not Intel is working on a 32/64 bit chip, he concurred with Belgard.

      "There are no legal barriers" that would prevent Intel from coming out with a chip that is similar and compatible with Opteron, he said. "There are no pitfalls either way."

      An AMD representative stated: "I believe that is the case," but added that it would all depend on the circumstances.

      Here's the key point

      Under the terms of the settlement, both companies gained free access to each other's patents in a cross-licensing agreement. AMD agreed to pay Intel royalties for making chips based on the x86 architecture, said Mulloy, who worked for AMD when the settlement was drafted. Royalties, he added, only go one way. AMD does get to collect royalties from Intel for any patents Intel might adopt.

      AMD also agreed not to make any clones of Intel chips, but nothing bars Intel from doing a clone of an AMD chip, Mulloy added.

      While the terms may seem one-sided, AMD has benefited from the agreement as well. Without the clean and enforceable right to make x86 chips granted by the agreement, AMD would not have been able to produce the K6, K6 II, K6III, Athlon, Duron, Athlon 64 or Opteron chips without fear of incurring a lawsuit.

      So Intel already have a right to use x86-64 license free.

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    6. Re:Only $1.25 Billion? by PitaBred · · Score: 3, Insightful

      And even then... since when is most desktop performance limited by the CPU any more? I bought a quad-core Phenom II for under $200 a couple months back. I have yet to feel limited by CPU speed. I mean... I have been transcoding my DVD's to insanely high quality H.264 at over 40FPS. If I transcode to an iPod format with handbrake, it'll hit over 300FPS. Why would I need to pay over double for a higher-performing i7, especially since the i7 will require new RAM and a motherboard, whereas the Phenom didn't?

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    7. Re:Only $1.25 Billion? by Anonymous Coward · · Score: 1, Insightful

      Cry me a fucking river. I can practically HEAR the attitude you would have given their tech support. "I'm a Systems Engineer for Chrissake man!"

  2. good thing? by ixidor · · Score: 2, Insightful

    but we still have to worry about intel bullying manufacturers like dell into using intel only. the dropping the lawsuit, 5 year no fire period is good though...

  3. Re:Laws by IndustrialComplex · · Score: 2, Insightful

    This is independant of action that the US government would take against Intel.

    Similar to how OJ was found not guilty in criminal court, but did end up paying restitution in civil court.

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  4. Stock price jumped... by ponos · · Score: 2, Insightful

    For those who bought AMD early enough, stock price jumped ~20% today. Not bad :-)

    Don't forget that 1.25 billion represents a significant portion of AMD's capitalization and far surpasses the cumulated
    earnings of the last few years.

  5. Re:Seems a shame by Lemming+Mark · · Score: 2, Insightful

    They did get soft indeed, particularly around the Pentium 4 / Itanium era. Actually neither of those seemed to sound obviously bad ideas at the time but they utterly failed to deliver on the promised benefits :-( AIUI the Pentium M processor was actually pretty close to the Pentium III design, which many people seem to have approved of.

    At least the stuff learnt from Pentium 4 (arguably even Itanium) systems hasn't been completely lost, since hyperthreading and EFI (for instance) are both seeing use in other products.

    It's been really good seeing the Pentium M -> Core -> Core 2 -> Core i7 development, being a kind of return to form for the company. Only trouble is that I *really* don't want them to become so good that they kill off the companies that are keeping them on their toes. I don't want to see them go soft again!