Intel Hyundai ink pact for patent cross-license

Electronic News, May 20, 1996 by Crista Hardie

Santa Clara, Calif.--Intel and Hyundai Electronics Industries put an end to pending litigation last week, signing what was termed a comprehensive patent cross-license and limited technology transfer agreement.

The patent cross-license covers the breadth of Hyundai's IC patent portfolio and all but Intel's microprocessor patents, an Intel spokesman said. The companies had been negotiating the pact for a couple of years after a cross-license deal involving specialty memory patents fell apart and resulted in Intel suing Hyundai for infringement.

"We are pleased to conclude this agreement resolving all pending intellectual property issues with Intel, and we look forward to further mutually beneficial relationships between our companies in the future," said Hyundai senior VP M.B. Chung.

Few specifics were released regarding the new agreement, except to say the deal gives Intel and Hyundai "certain rights under each others' patents." The specific scope of the licenses was not disclosed, nor were financial terms, nor the length of the agreement; such deals typically run a 10-year term, observers noted.

Hyundai is one of the world's largest suppliers of DRAMs, and also manufactures specialty memory products, PC chipsets and custom chips for a variety of applications. Meanwhile, Intel--besides being the top supplier of MPUs--is a noted leader in networking and communications products, as well as PC manufacturing. There is an obvious synergy between the companies' product offerings; however, Intel indicated no plans to pursue a particular development based on Hyundai technology.

"It's not so much a question of using a specific patent, but the freedom to design what you're working on using the best approach, without having to worry about whether it infringes the other guy's intellectual property," Intel's spokesman said.

A cross-license agreement is much like a barter, in which each company leverages its collection of patents. The perceived value of the patents are as important as the number of patents.

That is the sticking point in an on-going legal tug-of-war between Texas Instruments and Samsung Electronics, whose five-year cross-license agreement expired at the end of last year. The companies are doing battle in federal court and through the International Trade Commission (ITC) over the perceived value of certain patents (EN, Jan. 8). Samsung has a portfolio of more than 500 U.S. patents; however, TI has indicated the quality of the patents is more at issue than the quantity.

Intel maintains cross-license relationships with a number of companies, including TI, IBM, Motorola and Advanced Micro Devices, as well as Asian and European companies. Ted Jenkins, Intel's VP and director of corporate licensing, said: "Licensing formalizes the parties' mutual respect for intellectual property. It also allows both companies a continuing return on their research and development investments."