Last week, Opti Technologies announced a patent infringement lawsuit against a bevy of chip companies: Advanced Micro Devices, Atmel, Broadcom, Renesas Technology, Silicon Storage Technology, SMSC, STMicroelectronics and Via Technologies. At issue are two patents for "Compact ISA-Bus" technology.
Opti had recently sued Apple and AMD over three patents for "Predictive Snooping" technology used in some computer chips. And, in August of last year, Opti settled with Nvidia for $11 million plus up to $9 million more if nVidia continues to use Opti's technology in its products. The nVidia action included all five of the above-mentioned patents.
Silicon Valley faithful will remember Opti as a once-respected chip company that fell on hard times. Is the company's recent patent litigation rampage the death-throws of a desperate company or a promising new business model? Let's go through it.
At present, Opti has but one full-time employee, CEO Bernard Marren. And, according to the company's 1995 proxy statement, Marren gets a cut of everything he brings in to shareholders on a sliding scale that starts at 5 percent and ramps down to 1 percent. Mike Mazzoni, the company's part-time CFO, appears to have the same deal.
Do the math; it's not bad work if you can get it.
I had lunch with Marren a few weeks ago. The 71-year-old industry veteran seemed excited about Opti's prospects and he may have reason to be. Marren isn't new to executive management. He's a former founder and president of electronic distributor Western Micro Technology and the Semiconductor Industry Association (SIA). He sits on a number of boards, including Microtune, Infocus and Unipixel. Marren knows his way around the negotiating table.
For better or worse, patent infringement litigation is business as usual in the chip industry. If not for broad cross-license agreements, chip companies might spend more time suing each other than developing products. Nevertheless, some companies have carved out significant niches by developing and licensing technology. ARM, Qualcomm, Rambus, Tessera, even IBM and Texas Instruments, make a solid business of it. But, for the most part, these companies develop technology with that business model in mind. Believe me, they prefer to negotiate than to litigate. ... Read more
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