AMD, Intel patent squabble intensifies

AMD said Monday that it has been notified by Intel that it is breaching a 2001 patent cross license agreement.

In a regulatory filing, AMD said Intel is alleging that the creation of the GlobalFoundries is a material breach of the patent pact. Intel has threatened to terminate AMD's rights to the patents in question in 60 days.

For AMD's part, it argues that it hasn't breached the terms of the cross-licensing pact and Intel has no right to terminate the deal.

What's next? AMD says:

Under the terms of the Cross License, there is an escalating procedure for resolving disputes, and the Company has commenced the application of that procedure with respect to Intel’s purported attempt to terminate the Company’s rights and licenses under the Cross License. In addition, the Company has informed Intel that the Company maintains that Intel’s purported attempt to terminate the Company’s rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel which gives the Company the right to terminate Intel’s rights and licenses under the Cross License Agreement while retaining the Company’s rights and licenses under the Cross License Agreement.

Bottom line: This spat could take awhile. Sorting this out will revolve around whether GlobalFoundries is an AMD subsidiary or not. And figuring that out is a bit complicated to the layman. For instance, GlobalFoundries is on AMD's books sort of, but the whole point was to rid the chipmaker of debt obligations and capital expenses. Is GlobalFoundries a spin-off or a subsidiary? It's a bit of a hybrid.