AMD 1993 Annual Report Download - page 18

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Inducement Claim"); (2) AMD's license rights to Intel microcode expire as of
December 31, 1995 ("License Expiration Claim"); (3) that AMD's license rights to
Intel microcode do not extend to In-Circuit Emulation (ICE) microcode ("ICE
Claim"); and (4) that AMD is not licensed to authorize third parties to
manufacture products containing copies of Intel microcode ("Have Made Claim").
Intel's Fourth Amended Complaint further seeks damages and injunctive relief
based on AMD's alleged copying and distribution of Intel's "386 Processor
Microcode Program" in AMD's 486SX microprocessor. The Corporation answered the
complaint in January, 1994.
On December 1, 1993, Intel moved for partial summary judgment on its claim
for copyright infringement of Intel's 486 ICE microcode. This motion was heard
on March 1, 1994. The Court requested further briefing from the parties, and
indicated its intention to rule on the motion after the briefing is completed on
March 9, 1994.
By order dated December 21, 1993, the Court granted the Corporation's
motion to stay Intel's claim that AMD's 486SX infringes Intel copyrights on its
386 microcode. In light of the Ninth Circuit decision discussed above in the 386
Microcode Litigation reversing the Court's order staying the case, the stay
order in this action may be vacated and/or appealed and the litigation
concerning this claim may proceed.
AMD believes that the microcode copyright infringement claims made by Intel
in the 486 Microcode Litigation are substantively the same as claims: (i) made
in the 287 Microcode Litigation with regard to the Intel microcode, discussed
above and (ii) made in the 386 Microcode Litigation with regard to AMD's rights
to utilize the so-called Intel microcode, "control programs" and ICE microcode.
Intel has also made the following two new allegations not contained in either
the 386 or 287 Microcode Litigations: (i) despite any rights AMD may have to
copy the Intel microcode, those rights do not extend to foundry rights and thus
AMD cannot use foundries to manufacture the Am486 product with Intel microcode
and (ii) AMD's rights to Intel copyrights terminate on December 31, 1995.
As discussed above, in the 287 Microcode Litigation, the ultimate outcome
of the 287 Microcode Litigation could materially impact the outcome in the 486
Microcode Litigation. The outcomes in the 287 or the 486 Microcode Litigations
could affect the Corporation's ability to continue to ship and produce its
Am486DX products and thus have an immediate, material adverse impact on the
Corporation's trends in results of operations and financial condition. The
AMD/Intel Litigations involve multiple interrelated and complex issues of fact
and law. Therefore, the ultimate outcome of the AMD/Intel Litigations cannot
presently be determined. Accordingly, no provision for any liability that may
result upon the adjudication of the AMD/Intel Litigations has been made in the
Corporation's financial statements.
6. Intel Antitrust Case. On August 28, 1991, the Corporation filed an
antitrust complaint against Intel Corporation in the U.S. District Court for the
Northern District of California (Case No. C-91-20541-JW-EAI), alleging that
Intel engaged in a series of unlawful acts designed to secure and maintain a
monopoly in iAPX microprocessor chips. The complaint alleges that Intel
illegally coerced customers to purchase Intel chips through selective allocation
of Intel products and tying availability of the 80386 to purchases of other
products from Intel, and that Intel filed baseless lawsuits against AMD in order
to eliminate AMD as a competitor and intimidate AMD customers. The complaint
requests significant monetary damages (which may be trebled), and an injunction
requiring Intel to license the 80386 and 80486 to AMD, or other appropriate
relief. On December 17, 1991, the Court dismissed certain of AMD's claims
relating to Intel's past practices on statute of limitations grounds. Intel has
filed a motion for partial summary judgment on one of AMD's remaining claims for
relief, and the hearing on this motion is scheduled for March 4, 1994. The
current trial date is October 3,1994.
7. Intel Business Interference Case. On November 12, 1992, the Corporation
filed a proceeding against Intel Corporation in the Superior Court of Santa
Clara County, California (Case No. 726343), for tortious interference with
prospective economic advantage, violation of California's Unfair Competition
Act, breach of contract and declaratory relief arising out of Intel's efforts to
require licensees of an Intel patent to pay royalties if they purchased 386 and
486 microprocessors from suppliers of those parts other than Intel. The patent
involved, referred to as the Crawford '338 patent, covers various aspects of how
the Intel 386 microprocessor, the 486 microprocessor and future X86 processors
manage memory and how these
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1994