SGS-Thomson gets court to ok Cyrix x86 activity

Electronic News, Jan 9, 1995 by Carol Haber

NEW YORK -- THE U.S. Federal District Court in Sherman, Tex., ruled that SGS-Thomson Microelectronics U.S. was acting within the scope of its existing license with Intel in having x86 microprocessors made by a sister company in Europe and subsequently reselling such products to Cyrix. The ruling, which was made upon SGS-Thomson Micro's motion for summary judgment, is subject to appeal.

SGS and Intel have for a long time had a license agreement sharing patents; the charge was that SGS was not allowed to manufacture the products in Italy and resell them to Cyrix.

In a similar case, Intel had challenged the scope of its cross-license with IBM Microelectronics. In early December, a ruling upheld the right of IBM Micro to act as a foundry for Cyrix, but the judge had_ yet to rule on the rights of SGS-Thomson Micro to make products at a foundry in Agrate, Italy (EN, Dec. 19, 1994).

In the wake of the most recent decision, SGS-Thomson said that its U.S. subsidiary "has a broad cross-license with Intel which provides substantial benefit to both parties, and that SGS-Thomson Micro U.S. is very pleased to see its contract rights upheld once again."

The company also prevailed in a previous case in which Intel attacked Cyrix for patent infringements.

The dispute between Cyrix and Intel began in 1992 and originally involved several patents (EN, March 9, 1992).

The case was narrowed to the Crawford 338 patent after a July 1992 district court ruling that a patent cross-license between Intel and SGS-Thomson Micro protected Cyrix and its customers from infringement suits on component patents (EN, Aug. 30, 1992).

Intel asserted Claims 2 and 6 (referring to the combination of the CPU with external memory) of its Crawford patent were not covered under the patent cross-license.

At the time, Cyrix general counsel Russ Fairbanks had said: "They (SGS-Thomson) were using their Agrate facility to make product which they then purchased from Agrate and sold to Cyrix. Intel challenged that arrangement on the basis it was a sham, that it was never intended to allow SGS to have products for sale to Cyrix. They (Intel) have argued the relationship between Cyrix and SGS is such that Agrate is under Cyrix's direction, that SGS is just there to camouflage the situation."

Referring to the latest ruling, an SGS spokesperson said: "This is a confirmation that our license is very strong and valid. It confirms we have some operational freedom. The court has supported the point of view that the license extended to any fab of SGS wherever the location."