SGI hits ATI with lawsuit

Silicon Graphics Inc has emerged from bankruptcy protection and has slapped graphics chip vendor ATI with a patent infringement lawsuit.

SGI's chairman and chief executive officer, Dennis McKenna made it clear back in June that the company had plans to use use intellectual property enforcement as a way to generate additional cash for the If there is a patent violation then ATI has more than enough cash to make the problem go awaycompany until it got back on track.  It seems that McKenna was serious about this.

The lawsuit that SGI has filed against ATI claims patent infringement relating to patent number 6,650,327, "Display system having floating point rasterization and floating point framebuffering".  This patent was filed during 1998 and granted in 2003 and SGI are claiming that technology used by ATI in their Radeon graphics processors are violating this patent.  SGI already licenses this technology to other graphics chip vendors.

ATI has deep pockets, and they are even deeper now since the AMD takeover, and this has made it the ideal target.  But the lawsuits are unlikely to end with ATI.  McKenna has said that "SGI intends to aggressively protect and enforce its IP. This is the first viable step in that process". 

ATI spokesman Chris Evenden said the company is currently examining the lawsuit. "We're not commenting until we've analyzed every aspect of it," he said.

I don't see this lawsuit being much more than a nuisance for ATI.  If there is a patent violation then ATI has more than enough cash to make the problem go away (and on top of that, SGI is probably eager to settle quickly).  If there isn't a patent violation here then SGI might have bitten off more than it can chew.