Chip giant Intel squares off against PC flyweight

The two contestants are definitely not in the same weight category but their trademark dispute is due to be adjudicated by a civil court in Naples and the outcome could have legal repercussions around the globe.

In one corner is Intel, the heavyweight chip maker with more lawyers on its books than its opponent has staff. In the other corner is SBF Elettronica SRL, a personal computer assembler from the western Naples suburb of Fuorigrotta -- a little daunted, perhaps, but unbowed. To say flyweight is perhaps overstating it. SBF has fewer than a dozen employees and an annual revenue of around Euro 6 million (US$7.8 million), but, it believes, a strong position in law.

The Neapolitan company been sued by Intel for allegedly infringing its trademark. The Californian microchip leviathan served papers on SBF in September 2003, claiming that the use of its logo "G Genoa Power Inside" could cause confusion with the famous "Intel Inside" label and calling on it to desist.

SBF has sought to negotiate an amicable solution but is now dusting off its gloves for the next round in court, due to take place on March 15, according to SBF director and founder Silvestro Tedesco.

SBF registered the trademark in Italy in 1993 as an evolution of an earlier logo: "Genoa Board Inside," Tedesco explained. "We developed the logo because we originally distributed Beta standard video and mother boards produced by Genoa," he said.

Paradoxically, SBF's PCs no longer contain Genoa boards because the original manufacturer has gone bankrupt. But the company does not want to renounce the logo, having spent a lot of money -- by Fuorigrotta standards -- on promoting its products in conjunction with the symbol. "That trademark is associated with our product. We use it to promote our higher end PCs," Tedesco said.

In the European Union there are some 116 registered trademarks that use the word "Inside," including "Enermax Power Inside" used by the Taiwanese Enermax Technology, Tedesco said. "If anything, we might have reason to object to the Enermax logo."

"Intel claims the term 'Inside' can cause confusion with Intel's products and has called on SBF to cease from using it," said Davide Cesiano, one of the Naples company's attorneys. "SBF says there is no such risk, that G Genoa is a complex trademark and that 'Inside' is a term in common English use that does not of itself evoke the Intel trademark," Cesiano said. SBF's lawyers say neither the color nor the graphic design of the Naples trademark bear any resemblance to the better known Intel brand.

The dispute has been billed as a David and Goliath conflict by the Italian press and Goliath rarely seems to get a positive writeup. But Cesiano says he is not counting on sympathy for the little guy to help him win in court. "I have complete confidence in the Naples court and simply rely on the facts: there is no risk of confusion or association between the two symbols."

As well as the "G Genoa Power Inside" labels, many of SBF's products bear the rival words "Intel Inside" on their sides and the company is still hoping to convince Intel to agree to a co-marketing strategy rather than wasting resources on destructive litigation.

"This publicity is not particularly useful for us as we already count the top Italian companies among our clients," said SBF director Tedesco. "We have also been selling our computers to American soldiers from the Naples NATO base for the last eight years. We want to make peace with the Americans, not war. I'm sure we'll be able to reach an agreement once things calm down a bit."

For the moment, Intel appears to be showing a spirit of fair play by agreeing to compete with one hand tied behind its back. "It's not our practice to comment on current litigation," said Rita Fortunati, a spokeswoman for the company's Italian subsidiary in Milan.

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Philip Willan

IDG News Service

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