October 11, 2002, 9:44 AM — A U.S. district court on Thursday ruled that technology used by Intel Corp. in its 64-bit Itanium processors infringes on technology patents held by Intergraph Corp., a ruling that could require Intel to hand over at least US$150 million in liquidated damages to the smaller company, Intergraph said.
Judge John Ward of the U.S. District Court, Eastern District of Texas, ruled that Intel's Itanium products infringe on patented Intergraph technologies related to so-called parallel instruction computing (PIC). The judge said Intergraph's patents are "valid and enforceable" and that Intel's products "literally infringe" on parts of those patents, according to Intergraph.
Intel will ask the judge to reconsider the terms of his decision within the next 10 days, according to Chuck Mulloy, a spokesman at Intel. "We plan to file a motion for reconsideration and, if the judge denies that, we plan to appeal the ruling," Mulloy said.
Intergraph and Intel settled an earlier patent infringement case in April 2002. Under terms of that settlement, Intel paid Intergraph $300 million and licensed certain Intergraph technology patents. At the time, the companies also agreed to set liquidated damages for the PIC case, according to Intergraph's statement.
Under terms of that agreement, the Texas court's finding requires Intel to pay Intergraph $150 million in liquidated damages for the PIC infringements, according to Intergraph. Intel must then either appeal the District Court's decision, pay an additional $100 million for a license to Intergraph's PIC patents, or redesign its Itanium chips in a way that doesn't infringe on Intergraph's patents, Intergraph said.
If Intel chooses to appeal and then loses, terms of the April settlement will require it to pay the smaller vendor an additional $100 million, according to Intergraph.
"We would like to bring this to a conclusion," said Jeannie Robison, an Intergraph spokeswoman. "We have been in litigation for several years."
Intel is looking for the Itanium processor to boost its place in the high-end server market currently dominated by IBM Corp., Hewlett-Packard Co. and Sun Microsystems Inc. The company released the second version of its Itanium chip this year.
Intergraph, based in Huntsville, Alabama, provides software and services for a variety of vertical markets, including education, energy and public safety. The company was formally a maker of computer chips.
The Texas court ruling validates Intergraph's patents and paves the way for it to pursue licensing fees from other vendors in the consumer electronics and computer industries, Intergraph chairman and CEO Jim Taylor said in the statement.
Intergraph noted in its statement that Fujitsu Ltd. had recently licensed the PIC technology for use in consumer electronics and embedded applications.