August 3, 1998 7:05 PM PDT
Intel hit by $500 million lawsuit
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TechSearch, an Illinois intellectual property consulting group, is pursuing a patent infringement case that alleges that some of the intellectual property underlying the Pentium Pro and Pentium II processors infringes upon patents issued to International Meta Systems (IMS).
The lawsuit was first reported by The Electronic Engineering Times.
TechSearch's attorneys state that the dollar value of the case, in their view, is massive because of the numbers of Pentium Pro and Pentium II chips sold.
"It could be higher [than $500 million]," said Art Casey, an attorney with Niro Schavone, Haller & Niro in Chicago. "It depends on whether Intel is going to be reasonable in paying us some portion of that to acknowledge the value of that patent. They are going to have to show that they can be reasonable." TechSearch has made settlement overtures, he added. (Intel is an investor in CNET: The Computer Network).
In 1996, IMS was attempting to develop an "Intel competitive" microprocessor under its Meta 6000 effort, according to a spokesman at IMS. Its goal was to create a chip compatible with the Intel computing architecture but also incorporating independent intellectual property. In the Meta 6000 process, IMS filed a patent for a Reduced Instruction Set Computer (RISC) that could read Intel chip instructions. The patent was filed in March 1994 and granted in November 1996.
The Meta 6000 was never realized. IMS abandoned the effort and filed for Chapter 11 bankruptcy proceedings. During the bankruptcy proceedings, TechSearch acquired the patent that serves as the basis of the suit. The company bought the patent in November and filed its action this past June.
TechSearch itself is not a developer of intellectual property, according to IMS. Instead, the company buys underused or underexploited patents from original developers and then tries to develop their value further. Sometimes, TechSearch resells the patents. Other times, litigation erupts.
IMS itself did not contemplate a lawsuit against Intel when approached by TechSearch, according to the IMS spokesman. Because the Meta 6000 project had been abandoned, and because TechSearch issued the company a license for its technology, there was no reason not to sell the patent.
Chuck Mulloy, an Intel spokesman, denied the allegations in the suit.
"Our position is that we believe that the suit is without merit and that we will fight it vigorously," he said.