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Updated: Via and Intel settle patent infringement dispute
"The litigation was the biggest concern preventing many first-tier motherboard makers from using our chipsets," said Via marketing director Frank Jeng at a press conference in Taipei. "Now they are free to choose our products without any worries." The agreement makes Via the second fabless design house to receive a Pentium 4 technology license from Intel, following ATI Technologies, Inc., of Markham, Ontario. Taipei-based Via is expecting to ship products as early as this quarter to first-tier players like Asustek Computer Inc. and Microstar International Inc., both of which are headquartered in Taiwan While neither Intel, Santa Clara, Calif., nor Via gave reasons for the settlement or its timing, some analysts said that Intel's move is motivated in part by a desire for a strategic ally against United Microelectronics Corp. of Taiwan. UMC, the world's No.2 pure-play foundry service provider, paid $20.6 million for a 40% stake in a newly-established unit of ALi Corp., a smaller chipset design house that belongs to Taiwan's Acer Group, in February. Prior to that, UMC took over Silicon Integrated Systems Corp., Hsinchu, Taiwan, which owns about 20% of the global core-logic chipset market. Intel's share of that market stands at about 50%, while Via holds around 27%, some analysts said. "UMC is now in a position to control SiS and ALi," said Rick Hsu, a senior analyst at Nomura Securities Co. Ltd., Taipei. "If UMC offers price advantages to those two companies, that's all it would take for them to become a growing threat to Intel. Of course Intel doesn't want to see that happen, or anything else that would challenge its ability to set industry standards in the future." SiS said in a statement in response to the joint announcement by Via and Intel that it "always maintains a good relationship with Intel, and SiS is one of the most important chipset partners of Intel." The statement added that SiS is currently in the process of negotiating with Intel for P4 licenses, and expects to "have a final result in a short period of time."
Intel and Via announced on Monday that they had reached a settlement in their long-running patent lawsuits related to chipsets and microprocessors. The agreement encompasses 11 pending cases in five countries involving 27 patents. Under terms of the settlement both companies will dismiss all pending legal claims in all jurisdictions. The companies also entered into a ten-year patent cross license agreement covering each company's products. As part of the agreement Intel granted Via a license to sell microprocessors that are compatible with the x86 instruction set but not pin compatible or bus compatible with Intel microprocessors. Intel further agreed for a period of three years, not to assert its patents on Via bus or pin compatible microprocessors. Intel also granted Via a four-year license to design and sell chipsets that are compatible with the Intel microprocessor bus and agreed not to assert its patents on Via or its customers or distributors on such chip sets for a fifth year. The agreement will be royalty bearing to Intel for some products. The license agreements do not apply to S3 Graphics, a company partially owned by VIA. Each company is responsible for its own attorney's fees. Specific financial and other terms of the agreement were not disclosed. Intel initiated the litigations in September 2001, claiming that Via's microprocessor and chipset products infringed Intel patents. Via countersued, claiming that Intel microprocessors infringed three patents VIA acquired in connection with its acquisition of IDT's Centaur subsidiary. In December, Via Technologies Inc. claimed it had gained a favorable ruling against Intel in England over a bitter PC chip-set patent suit. A year earlier, the companies withdrew complaints against each other in another aspect of the patent dispute.
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