AMD 2007 Annual Report Download - page 23

Table of Contents
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 Inc.’s initial public offering, or IPO, in December 2005, we
and Fujitsu Limited 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.
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 or 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 Corporation 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 assignment for the benefit of creditors, the institution of any proceedings for the
liquidation or winding up of the other party’s business, or in the event of a change of control. For purposes of our agreement with Intel, change of control means
a transaction or a series of related transactions in which (i) one or more related parties who did not previously own at least a 50 percent interest in a party obtain
at least a 50 percent interest in such party, and, in the reasonable business judgment of the other party, such change in ownership will have a material effect on
the other party’s business, or (ii) a party acquires, by merger, acquisition of assets or otherwise, all or any portion of another legal entity such that either the
assets or market value of such party after the close of such transaction are greater than one and one third of the assets or market value of such party prior to such
transaction.
Backlog
We manufacture and sell standard lines of products. Consequently, a significant portion of our sales are made from inventory on a current basis. Sales are
made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of time. These orders or agreements may be
revised or canceled
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008