Toronto firm slaps Intel with US$500M patent suit

A Toronto company credited with creating one of the first PCs filed a US$500-million lawsuit against Intel Corp. Thursday, claiming Pentium processors are an infringement on a 1996 patent.

According to the complaint filed by All

Computers Inc., the alleged infringement is against Patent Number 5,506,981, titled “”Apparatus and Methods for Enhancing the Performance of Personal Computers.”” A statement from the company’s legal counsel, Laguna, Calif.-based Levin & O’Connor, said the pioneer patent “”describes and claims the basic circuitry necessary for the modern operation of high speed processors.””

“”(Intel) started infringing probably with the Pentium II,”” said Edward O’Connor, a partner at Levin & O’Connor. “”Subsequent to that, All Computers tried to license this technology to Intel, which basically blew them off.””

O’Connor added that All Computers “”started investigating Intel to see whether Intel may already be using their technology. It appeared to be doing so based on Intel’s own public documents as well as the understanding by All Computers as to how the technology probably works.””

O’Connor said he has confirmed these findings through consultation with experts. He would not identify them by name, describing them as university professors and experts in computing.

He said All Computers waited until 2004 to file a patent infringement suit because it took time to investigate the technology. “”There’s also the issue of, do you really want to sue a big company like this, so this decision took some time to make.””

All Computers was founded by Mers Kutt in 1971. Kutt, 71, developed the MCM-70 microcomputer in 1973, which is widely recognized as being the world’s first personal computer. Kutt, who is no longer with the company, did not return calls for comment at press time.

When contacted, Intel spokesperson Chuck Mulloy said that the company would not comment on the All Computers suit until its legal team had reviewed the complaint.

Santa Clara, Calif.-based Intel recently settled a patent infringement suit with Intergraph for US$225 over its Itanium chips. Intergraph filed the suit in 2001, alleging that Itanium infringed on its Clipper processor patents.

Processor analyst Dean McCarron with Scottsdale, Ariz.-based Mercury Research described Intel as “”a lightning rod”” for legal suits because the company has deep pockets.

“”The other issue is that Intel themselves files a very large number of patents and does a lot of product development,”” he said. “”As a result of that, there are a lot of products that could potentially infringe on something. Obviously as a company they would do everything they could in order to avoid that.””

McCarron added that Intel is typically aggressive in defending itself against such suits, the Intergraph settlement notwithstanding. Intel has pursued its own patent infringement lawsuits against several companies, including a drawn-out battle with Taiwan-based Via, which was resolved in 2003.

According to O’Connor, there are companies other than Intel that are also infringing on the All Computers patent. “”(The patent) a recognition of a future problem that was going to be made necessary by faster and faster computers and faster and faster processors. And sure enough, it appears that Intel — and probably a bunch of other people — used exactly that technology,”” he said.

He added that he is weighing the possibility of suing other microprocessor companies, as well as OEMs that use processors in their computers, but will focus on the Intel case first.

The lawsuit was filed in the Alexandria Federal Court in Virginia, which O’Connor described as the “”rocket docket”” for its reputation for speedy trials. “”They get you in and out in eight months. We don’t want to sit around on the case for five years waiting for trial.””

He added that the appellate process could add up to three years to the legal proceedings.

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