Intergraph Asks Court for Summary Judgment in Patent Dispute with Intel; Says Trial on Patent License Unnecessary

Business Wire, Sept 17, 1998

HUNTSVILLE, Ala.--(BUSINESS WIRE)--Sept. 16, 1998--In a bold show of confidence, Intergraph Corporation (NASDAQ/NMS: INGR) has asked a federal court for a summary judgment in its claim that Intel Corporation has no license to Intergraph patents. In the same filing, Intergraph also asked the court to dismiss Intel's original motion for a summary judgment accepting its patent license defense against Intergraph's patent infringement claim.

In sum, Intergraph says it is so clearly documented that the Intergraph patents were never licensed to Intel that a trial on the issue is not needed.

"The documents involved in our acquisition of this intellectual property are very, very clear," stated Intergraph CEO Jim Meadlock. "Intel twisted the meaning of various documents to read the way they want them to read. But it won't work and there's no sense in spending resources to prepare for and conduct a trial on the matter. The judge can rule based on the evidence at hand," Meadlock added.

Intergraph filed its cross-motion with the U.S. District Court, Northern District of Alabama, on September 15, 1998.

Among claims in its suit filed November 17, 1997, Intergraph contends that Intel has used Intergraph patented technology in its Pentium family of microprocessors without license and without compensating Intergraph. Intergraph further alleges in its suit that Intel engaged in anticompetitive behavior in an attempt to coerce patent licenses from Intergraph, violating U.S. antitrust law in the process. An April 10 preliminary injunction granted Intergraph key injunctive and mandatory relief and further stated that there is a "substantial likelihood" Intergraph will succeed in proving that Intel has violated Sections 1 and 2 of the Sherman Antitrust Act. The trial is set for February 14, 2000.

Patent Applications Passed Directly to Intergraph

The cross-motion filed yesterday forcefully states the case that Intel ignores numerous principles of contract law and the particular circumstances of this lawsuit.

According to Intergraph, the patent applications (and resulting patents) were acquired by Intergraph when it bought part of Fairchild Semiconductor Corporation in 1987. Intergraph acquired Fairchild's Advanced Processor Division (APD) at the same time National Semiconductor Corporation (NSC) acquired Fairchild from Schlumberger, Ltd.

Intel claims that a preexisting cross-licensing agreement it had with NSC encompassed patent applications related to APD's Clipper microprocessor. However, Intergraph contends that the APD assets never passed to NSC, but instead had been pre-sold to Intergraph and passed directly from Fairchild to Intergraph on October 8, 1987, under terms of a September 15, 1987 Letter of Intent with NSC and a September 30, 1987 Purchase Agreement with NSC and Fairchild. On October 8, Fairchild assigned its entire interest in the Clipper patent applications to Intergraph - simultaneous with the transfer of all of its outstanding stock to NSC. (A timeline of events appears at the end of this press release.)

"The Clipper Applications were never subject to the terms of the Intel/NSC Cross-License. They were sold by Fairchild to Intergraph pursuant to the ... Letter of Intent and the ... Purchase Agreement before NSC acquired Fairchild's stock. Title to the Clipper Applications transferred to Intergraph simultaneously with the closing of the stock acquisition," Intergraph says in its filing.

"The written assignment (of patent applications) records a transfer of all rights directly from Fairchild to Intergraph," the company further notes in yesterday's filing. Since NSC never owned the patent applications, "NSC was legally incapable of licensing patents to Intel."

Subsequently, the patents themselves were issued to Intergraph by the U.S. Patent Office on February 6, 1990, June 12, 1990, and February 25, 1992.

(While Intel asked that the Intel/NSC Cross-License agreement be held under seal by the court and not available to the public, Intergraph has made the Letter of Intent and the Purchase Agreement related to its purchase of Fairchild's APD Business part of the public record.)

Intel Implies Fraud by Fairchild and National Semiconductor

Intergraph's court filing also notes that Fairchild and NSC warranted to Intergraph that full and exclusive rights to the Clipper patent applications were assigned to Intergraph without any encumbrances (including any licensing obligations to Intel). For Intel to suggest otherwise, Intergraph says, implies that Fairchild and NSC intended to defraud Intergraph.

Note to Editors: Information related to this lawsuit - including court filings, a chronology, and numerous news articles - is available for public viewing on the Intergraph Website at www.intergraph.com/intel.> Intergraph Background Information

A computer industry pioneer, Intergraph Corporation provides comprehensive engineering, mapping/GIS, and IT solutions for the process and building, utilities and transportation industries, and local and national governments. For desktop or enterprise solutions, Intergraph offers software, computers, support, consulting, and training services. Industry analysts consistently rank Intergraph as a top solutions provider in the markets the company has served for three decades.