Court throws out Via charges against Intel

The English High Court has ruled against Via Technologies in a lawsuit against chipmaker Intel over the licensing of Pentium 4 patents, ruling that Intel's refusal to license the technology to Via did not constitute market abuse. The case is one of several between the two companies over Pentium 4-related intellectual property.

Intel sued Via in England last September, alleging that Via infringed its patents by selling Pentium 4-compatible chipsets without a licence. In Via's countersuit, filed last December, the counterclaim was that Intel broke European competition laws by refusing to grant Via a licence to use Pentium 4 technology in Via's chipsets.

Via is the No. 2 chipset maker after Intel, and the lack of a licence has made it difficult for Via to sell its Pentium 4-compatible products. A chipset is built into a PC's motherboard and enables the processor to communicate with other system components.

Via argued that Intel's infringement lawsuit was an attempt to force Via to accept an unfavourable Pentium 4 licence. Via also claimed that Intel's refusal to grant a licence was an abuse of its dominant market position.

The court decided against Via on the grounds that Intel's granting or refusing the licence was not a life-or-death matter for Via. A refusal to grant a licence was not in itself an abuse of Intel's position, the court said, unless the refusal would create exceptional circumstances such as "complete elimination of all competition within the relevant market," according to a case report by the British law firm Masons.

This was not true in the current situation, the court said, since several other companies continue to compete with Intel in the Pentium 4 chipset market.

To decide in favour of Via would therefore compel intellectual property holders to license their technology in the future, according to the court. "To grant (Via) the relief sought would effectively be to create a new form of compulsory licensing and there was no authority to justify this," the court said, according to the Masons report.

Intel commented that Via did not have enough material to justify its position. "Via did not meet the legal standards necessary to continue pursuing the case," said a spokesman.

Struan Robertson, a solicitor with Masons, said the decision was "not hugely significant" in light of the large number of other ongoing cases between Intel and Via. "They were just saying that what Intel was doing by refusing permission to Via was not anticompetitive," Robertson said. "Patent owners have rights in how they license their patents."

Via representatives were not available to comment for this story.

The patent infringement portions of Intel's lawsuit against Via will be heard in December of this year and February of next year.

Intel kicked off the legal proceedings in September of last year by filing a suit in federal court in Delaware against Via for patents relating to chipsets. The suit alleges that Via is making Pentium 4 chipsets without a licence. Via responded with a lawsuit in the US District Court in Texas claiming that Pentium 4 uses technology from Via's C3 processor. In October Intel filed a counterclaim charging that Via and its Centaur subsidiary infringed Intel patents in the C3 chip.

Subsequently, Intel filed more suits against Via and its various business partners in Hong Kong, England and Germany. In the suits in Hong Kong and England, Intel alleged for the first time that Via is infringing on its processor technology.

Vicious legal wrangling is sort of a holiday tradition between Intel and Via. While Via serves sometimes an active ally of Intel, the two companies compete to land deals with PC makers and motherboard manufacturers.

Intel filed a similar series of lawsuits against Via and a number of companies associated with Via in 1999, after the company came out with a Pentium III chipset. Via, which saw its sales zoom with the new chipset, alleged Intel was merely trying to muscle out a successful competitor.

Eventually, the companies settled the bulk of the lawsuit and entered into a licensing agreement. Intel, however, continues to pursue a claim that the underlying patents in the earlier case are being infringed by chipsets Via manufactures to go with processors from AMD.

CNET News.com's Michael Kannellos contributed to this report.

To find out more about the computers and hardware that these chips are being used in, see ZDNet UK's Hardware News Section.

Have your say instantly, and see what others have said. Go to the Chips Central Forum.

Let the Chips Central editor know what you think by email. And sign up for the weekly Chips Central newsletter.