AMD 1995 Annual Report Download - page 25

and Intel the rights to use each others' patents and certain copyrights,
exclusive of microprocessor microcode copyrights. The cross-license is royalty-
bearing for the Corporation's products that use certain Intel technologies. The
Corporation is required to pay Intel minimum non-refundable royalties during the
years 1997 to 2000.
In addition, AMD has entered into numerous cross-licensing and technology
exchange agreements with other companies under which it both transfers and
receives technology and intellectual property rights. Although the Corporation
attempts to protect its intellectual property rights through patents,
copyrights, trade secrets and other measures, there can be no assurance that the
Corporation will be able to protect its technology adequately or that
competitors will not be able to develop similar technology independently. There
can be no assurance that any patent applications that the Corporation may file
will be issued or that foreign intellectual property laws will protect the
Corporation's intellectual property rights. There can be no assurance that any
patent licensed by or issued to the Corporation will not be challenged,
invalidated or circumvented or that the rights granted thereunder will provide
competitive advantages to the Corporation. Furthermore, there can be no
assurance that others will not independently develop similar products, duplicate
the Corporation's products or design around the patents licensed by or issued to
the Corporation.
From time to time, AMD has been notified that it may be infringing
intellectual property rights of others. If any such claims are asserted against
the Corporation, the Corporation may seek to obtain a license under the third
party's intellectual property rights. The Corporation could decide, in the
alternative, to resort to litigation to challenge such claims. Such challenges
could be extremely expensive and time consuming and could materially adversely
affect the Corporation's business, financial condition and results of
operations. No assurance can be given that all necessary licenses can be
obtained on satisfactory terms, nor that litigation may always be avoided or
successfully concluded. (See also Item 3, Legal Proceedings, Numbers 6 and 7.)
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Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 1996