AMD breached cross-licensing agreement with Intel

AMD will find itself in more legal fights with Intel, as they have breached the cross-licensing agreement when they spun-off manufacturing into what is now GlobalFoundries. Intel wants AMD to stop manufacturing x86 CPUs in the next 60 days.

AMD planned to be the number 1 customer of GlobalFoundries, which already manages all that were AMD foundries, but this constitutes a breach, as AMD was required to have fabs under the licensing agreement with Intel.

Here's the full press report:

Intel Notifies AMD of Cross-License Breach
Efforts to Resolve Dispute Continuing

SANTA CLARA, Calif. March 16, 2009 - Intel Corporation today disclosed that the company has notified Advanced Micro Devices (AMD) that it believes AMD has breached a 2001 patent cross-license agreement with Intel. Intel believes that Global Foundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. Intel also said the structure of the deal between AMD and ATIC breaches a confidential portion of that agreement. Intel has asked AMD to make the relevant portion of the agreement public, but so far AMD has declined to do so. AMD's breach could result in the loss of licenses and rights granted to AMD by Intel under the agreement.

"Intellectual property is a cornerstone of Intel's technology leadership and for more than 30 years, the company has believed in the strategic importance of licensing intellectual property in exchange for fair value. However AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent," said Bruce Sewell, senior vice president and general counsel for Intel. We have attempted to address our concerns with AMD without success since October. We are willing to find a resolution but at the same time we have an obligation to our stockholders to protect the billions of dollars we've invested in intellectual property."

Under terms of the license agreement the notification to AMD means the parties will attempt to resolve the dispute through mediation. In response to the notification AMD claimed Intel breached the agreement by notifying AMD of its breach. Intel believes that position is inconsistent with the dispute resolution process outlined in the original agreement.

So Intel believes that GlobalFoundries is not a subsidiary and that breaches the deal made between the two. The contract with ATIC from Abu Dhabi is also mentioned and this seems to be the central point of Intel's dispute - because Intel nows nothing about it.

AMD has known about this possibility for a long time and it went ahead with the deal. It would be very stupid of them to do that if they thought they might loose the case.
Intel is currently also a licensee of the AMD64 extensions, which Intel calls EM64T, AFAIK. Although I don't know much of the intricates of this deal, it would seem that if AMD can't produce any more x86 CPUs, Intel won't be able to produce any more x86-64 processors.
There's simply too much cross-licensing today and any one of them would get hurt in the process, so this seems more bluff, which, like the anti-trust case against Intel, will probably lead nowhere useful for either company.

The main dish is the deal with ATIC, which Intel wants to know more about. This will mean that some legal blows thrown both ways until AMD makes the terms of the deal public, ending the debacle. Summing it up, I use a portion of the title: "Efforts to resolve dispute"