Intel sues Via over P4 chip sets

In a move that has been anticipated for months, Intel Corp. Friday filed a patent infringement lawsuit against Via Technologies Inc. in U.S. District Court in Delaware. The suit alleges that the Taiwanese chip-set maker's P4X266 and P4M266 chip sets violate five patents associated with Intel's Pentium 4 processor, according to Intel spokesman Chuck Mulloy. Reached for comment, Via spokesman Dan Havey said he was unaware of the lawsuit.

Via does not have a license for the 400MHz bus that is used with the Pentium 4 processor and Intel officials have repeatedly hinted at the possibility of legal action over the P4X266 in recent months. For their part, Via officials have maintained that Intel does not have a patent that covers the bus.

"We haven't broken any patents," said Richard Brown, director of marketing at the Taipei-based PC chip set and processor vendor, at the launch of the P4X266 last month. "As far as we know we haven't infringed any of Intel's patents."

In recent months, Via officials have pointed to a cross-licensing agreement between Intel and S3 Graphics Inc., which is affiliated with Via and is named as a co-defendant in the lawsuit; S3 Graphics is a joint venture between Via and Sonicblue Inc. Via officials claim that cross-licensing agreement covers the P4X266 as well. Speaking last month, Brown would not comment on whether the P4X266 contains intellectual property from S3. However, Via plans to release in November the P4M266, which integrates a graphics core from S3 with the P4X266.

Via's integration of the graphics core may help the company defend its use of the technology, according to one analyst.

"Intel is angling that the S3 agreement has no validity for the Via chip set whether they have integrated graphics or not," said Kevin Krewell, a senior analyst with MicroDesign Resources Inc. "It may be a valid case that there is S3 technology in the chip (set), so it could be covered by the (S3 and Intel) agreement."

At the heart of the legal battle between Via and Intel is a contest over memory and pricing. Existing Pentium 4 chip sets made by Intel support RDRAM (Rambus Dynamic Random Access Memory), but the P4X266 uses much cheaper DDR SDRAM (Double Data Rate Synchronous DRAM). Intel has plans to release its own chip set that supports DDR, the 845, later this year with 845-based motherboards expected to appear in volume during January.

Intel has issued a Pentium 4 chip-set license to a handful of companies, including Via rivals Acer Labs Inc. (ALI) and Silicon Integrated Systems Corp. (SiS).

One analyst said Intel had no choice but to sue Via, in order to maintain a level playing field for those who have licensed its technology. "If Intel allowed Via to do this (sell Pentium 4 chip sets without a license), that would give them an unfair advantage," said Nathan Brookwood, principal analyst with Insight 64 in Saratoga, California. "Intel has an obligation to maintain a level playing field with regard to other licensees."

If Intel did not sue Via for using the technology without a license, Via would have a cost advantage over those companies that had. "It would make it very hard for Acer (ALI) and SiS to compete with Via," Brookwood said.

The timing between Intel's upcoming launch of its own 845 chipset and the lawsuit is most likely a coincidence, he said. "They had to wait until Via created a transaction where they sold these," Brookwood said. "As long as Via wasn't selling them, there was no violation of Intel's (intellectual property)."

When Paul Otellini, executive vice president and general manager of the Intel Architecture Group, was asked about Via's chipset at the Intel Developer Forum last month, "Otellini's response was that it takes two to tango," Brookwood said. "It didn't appear that Via was willing to negotiate with Intel," he said. "I think they wanted to get Via to the negotiating table," he added.

This is not the first time that Intel and Via have locked legal horns over chip set licensing.

In 1999, Intel filed lawsuits against Via in the U.S., Singapore and the U.K., alleging that Via and some of its customers illegally used the P6 bus used with the Pentium III in chip sets. The companies settled the lawsuits last year.

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