AMD 2006 Annual Report Download - page 23

Table of Contents
Intellectual Property and Licensing
We rely on contracts and intellectual property rights to protect our products and technologies from unauthorized third-party copying and use. Intellectual
property rights include copyrights, patents, patent applications, trademarks, trade secrets and maskwork rights. As of December 31, 2006, we had more than
6,000 patents in the United States and over 1,600 patent applications pending in the United States, including more than 600 patents in the United States and 400
patent applications in the United States that we acquired from ATI. In certain cases, we have filed corresponding applications in foreign jurisdictions. We expect
to file future patent applications in both the United States and abroad on significant inventions, as we deem appropriate. We do not believe that any individual
patent, or the expiration thereof, is or would be material to our business.
In connection with the formation of Spansion LLC as of June 2003 and the closing of Spansion’s initial public offering, or IPO, in December 2005, we and
Fujitsu transferred to Spansion various intellectual property rights pursuant to an Intellectual Property Contribution and Ancillary Matters Agreement, or
IPCAAMA. Under the IPCAAMA, Spansion became the owner or joint owner with each of us and Fujitsu, of specified patents, patent applications, trademarks
and other intellectual property rights and technology. The patents that we transferred included patents and patent applications covering Flash memory products
and technology, the processes necessary to manufacture Flash memory products, and the operation and control of Flash memory products. We reserved rights, on
a royalty free basis, to practice the contributed patents and to license these patents to our affiliates and successors-in-interest. We also have the right to use the
jointly-owned intellectual property for our internal purposes and to license such intellectual property to others to the extent consistent with our non-competition
obligations to Spansion.
In addition, for as long as our ownership interest in Spansion remains above 12.5 percent, Spansion is required to identify its technology to us and to
provide copies of, and training with respect to, that technology. Spansion also granted a non-exclusive, perpetual, irrevocable, fully paid and royalty-free license
of its rights in this technology to us. We may grant licenses under Spansion’s patents, provided that these licenses are of no broader scope than, and are subject to
the same terms and conditions that apply to, any license of our patents granted in connection with such license, and the recipient of such license grants to
Spansion a license of similar scope under its patents.
We also have a patent cross-license agreement with Fujitsu whereby each party was granted a non-exclusive license under certain of the other party’s
respective semiconductor-related patents. This patent cross-license agreement terminates on June 30, 2013, unless earlier terminated upon 30 days notice
following a change of control of the other party. We also have a patent cross-license agreement with Spansion. The patents and patent applications that are
licensed are those with an effective filing date prior to the termination of the patent cross-license agreement. The agreement will automatically terminate on the
later of June 30, 2013 and the date we sell our entire equity interest in Spansion. The agreements may be terminated by a party on a change in control of the other
party or its semiconductor group.
In addition, as is typical in the semiconductor industry, we have numerous cross-licensing and technology exchange agreements with other companies
under which we both transfer and receive technology and intellectual property rights. One such agreement is the patent cross-license agreement with Intel which
was effective as of January 1, 2001. Under this agreement we granted each other a non-exclusive license under each party’s patents for the manufacture and sale
of semiconductor products worldwide. We pay Intel a royalty for certain licensed microprocessor products sold by us or any AMD affiliate anywhere in the
world. The license applies to each party’s patents that have a first effective filing date during the capture period, which is the period from January 1, 2001
through January 1, 2010. Either party may terminate the agreement if the other party commits a material breach of the agreement and does not correct the breach
within 60 days after receiving written notice thereof. In addition, either party may terminate the agreement upon 60 days written notice in the event of a filing by
the other party of a petition in bankruptcy or insolvency, or any adjudication thereof, the filing of any petition seeking reorganization under any law relating to
bankruptcy, the appointment of a receiver, the making of any
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007