Intergraph Comments on Federal Trade Commission's Settlement with Intel of Antitrust Lawsuit; Intergraph's Broader Lawsuit Against Intel Scheduled for February 2000 Trial

Business Wire, March 17, 1999

HUNTSVILLE, Ala.--(BUSINESS WIRE)--March 17, 1999--Intergraph Corporation (NASDAQ/NMS:INGR) today made the following statement in response to the publication of the proposed settlement in the U.S. Federal Trade Commission's antitrust lawsuit against Intel Corporation. The settlement was announced March 8, one day before the FTC's trial was scheduled to begin, and was published for public comment today. Intergraph has a similar but broader private lawsuit against Intel for illegal coercive behavior, patent infringement, and antitrust violations of the Sherman Act. The Intergraph suit was filed in November 1997, eight months before the FTC brought its action, and is scheduled for trial in February 2000.

Intergraph commends the FTC for its firm actions to protect and

preserve a competitive climate in the computing industry. The FTC

was fulfilling its duty as a federal consumer protection agency

charged with guarding the marketplace from unfair methods of

competition. The Commission and its staff have done their part to

protect free enterprise.

Clearly, the FTC's concerns and actions were well-founded for

Intel to have chosen to settle out of court. This outcome is

consistent with the preliminary injunction entered last April by

the Federal judge in Intergraph's separate case against Intel. At

that time - even before the FTC had brought its action - the judge

found that Intergraph has a "substantial likelihood" of proving

that Intel violated Sections 1 and 2 of the Sherman Antitrust Act

and engaged in illegal coercive behavior against Intergraph.

Intel's readiness to settle out of court validates the trial

court's findings.

This consent decree is an additional protection for Intergraph.

Should the preliminary injunction in Intergraph's lawsuit happen

to be lifted on appeal, Intergraph is still protected by this

consent decree. (The preliminary injunction gives Intergraph the

Intel products and information needed to conduct business pending

trial in February 2000.)

With the FTC's action ending with a consent decree, Intergraph

can now totally focus on its trial against Intel in Federal Court

in Alabama.

Intel Pattern of Conduct Harms Competition

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Intergraph brought its private lawsuit against Intel in November

1997, having been forced to seek protection from a year of coercive

actions by Intel. At that time, Intergraph viewed its case as an

isolated example of Intel abusing its monopoly power. However,

some eight months later the FTC presented broad evidence of a

pattern of conduct by Intel - a pattern that had threatening

implications for competition in general. Intel's intimidating and

predatory behavior discourages companies from exercising their

patent rights ... which reduces overall innovation ... which

lessens competition ... which lessens choice and selection ...

which hurts consumers and the U.S. economy.

Intel's actions have certainly hurt Intergraph. Given the clear

evidence of such, including evidence subpoenaed from the FTC's

investigation, Intergraph expects to win verdicts and collect

damages in all three areas of its broad lawsuit: patent

infringement, illegal coercive behavior, and antitrust

violations.

While the FTC fulfilled its particular duty to ensure a level

playing field for competition and innovation, Intergraph's suit

seeks protection and damages specific to Intergraph's business and

patents.

The Abusive Actions of a Monopolist

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Although the FTC's case concluded before such a finding, Intel is

undoubtedly a monopolist and has unquestionably abused its

monopoly power.

Beyond its market share, Intel's actions illustrate its monopoly

power. Faced with an intellectual property dispute, instead of

negotiating a settlement Intel acted in a way that could only be

used by a monopolist - it used coercion.

In its dealings with Intergraph, Intel unilaterally cancelled

non-disclosure agreements ... refused to provide errata or "bug"

data on released products ... blocked Tektronix from selling test

equipment to Intergraph ... brought competitors into Intergraph's

accounts ... and engaged in other coercive actions. These

intentional acts were initiated by Intel without provocation and

were intended to overpower a vulnerable company which was

"locked-in" to Intel technology. The sole purpose was to gain

access to technology which would benefit Intel's position and to

gain such access under terms Intel dictated. Intergraph believes

it was abuse of power by a monopolist who had no legitimate

business justification for taking such actions. The preliminary

injunction is based upon this evidence.

Intergraph's lawsuit therefore asserts claims against Intel for

wrongful conduct including fraud, misappropriation of trade

secrets, tortious interference with business relations,

wantonness, breach of contract, breach of express and implied

warranties, promissory estoppel, negligence, anti-competitive

conduct, and patent infringement.

Settlement Situation

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While the settlement between the FTC and Intel has been called a