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. late last month, 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.””

He added All Computers “”started investigating Intel to see whether it was already 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, but described 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 (such as) 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.

Intel spokesperson Chuck Mulloy said 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 million over its Itanium chips. Intergraph filed the suit in 2001, alleging that Itanium infringed on its Clipper processor patents.

Dean McCarron, a processor analyst 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 (itself) files a 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 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) is a recognition of a future problem that was going to be made necessary by faster computers and faster processors. Sure enough, it appears Intel — and probably a bunch of other people — used exactly that technology,”” he said.

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Jim Love, Chief Content Officer, IT World Canada

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