Intel-AMD x86 License Dispute Boils Over

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Intel and Advanced Micro Devices have escalated a dispute over their x86 cross-license agreement, with each company insisting Monday that it has the right to turn off the other's access to its intellectual property while conducting its own business as usual.

How ugly is it? Intel, AMD alleges, has threatened to terminate the smaller chip maker's rights and licenses under the agreement in 60 days if the conflict over AMD's spin-off of its manufacturing assets isn't resolved. And AMD says Intel's alleged 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."

So far, the dispute has not proceeded to litigation and remains a private matter between Intel and AMD, though in recent months neither company has been shy in publicly airing making known allegations committed by the other.

The dispute centers around Sunnyvale, Calif.-based AMD's recently finalized deal to spin off its manufacturing assets to form a new company called Globalfoundries that is majority-owned by Abu Dhabi-based Advanced Technology Investment Co. (ATIC). Years in the making, the move was approved by AMD shareholders in February.

Intel contends that AMD's new arrangement means the smaller company would be extending Intel's x86 licensing rights to a third party without Intel's consent. The Santa Clara, Calif.-based chip giant claimed in a statement Monday that "Global Foundries [sic] is not a subsidiary under terms of the [2001 patent cross-license] agreement."

AMD, in a statement also released Monday, insists that "the structure of Globalfoundries takes into account all our cross-license agreements." The smaller chip maker filed a form 8-K with the U.S. Securities and Exchange Commission Monday, informing the SEC that it had received correspondence from Intel alleging that AMD had "committed a material breach" of the x86 cross-license agreement by creating Globalfoundries and that Intel would terminate AMD's rights and licenses under the agreement in 60 days unless the matter was corrected.

Intel does claim that "AMD's breach could result in the loss of licenses and rights granted to AMD by Intel under the agreement." But Intel legal spokesman Chuck Mulloy would not comment on whether a specific 60-day injunction against AMD was being sought. Mulloy told Channelweb Monday that the steps Intel was taking were merely part of the procedure for dispute resolution established in the agreement itself.

"Through this whole process, first it was 'asset light' then it was 'asset smart,' and then The Foundry Company and now it's called Globalfoundries, through the whole period we have advised AMD privately and stated publicly that we will work to protect our intellectual property rights," he said.

Next: What's A Subsidiary, Anyway?

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