By Dan Jones

Intel Corp has lost an important stage in its court battle with TechSearch LLC, which is suing Intel for between $2bn and $8bn over a disputed patent (CI No 3,642). The judge in the case has decided in favor of Chicago-based TechSearch on the technical basis of the patent, which relates to technology that allows microprocessors to emulate the instruction sets of other microprocessors.

US Patent No. 5,574,927 has certainly had an interesting history. The emulation technology was developed and patented by Austin, Texas-based International Meta Systems Inc which planned to develop its own range of Intel-compatible processors. However, the company ran out of money and had to file for bankruptcy early in 1998. TechSearch bought the patent for $50,000 and filed suit against Intel on June 25 of the same year, alleging that Intel was infringing its patent.

The Markman decision comes after the judge has heard each side’s technical explanation of the patent in question. The patent is important for Intel because emulation is a key technology in Intel’s Pentium chips and its forthcoming 64-bit processor – the Itanium. However, the judge’s Markman decision is not the crippling blow it may seem to be for Intel, according to Ernie Beffel, a patent lawyer from the firm Haines and Beffel. 45% of these Markman decisions are reversed by the federal court of appeal, he said, the reversal rate is so huge the Markman order can’t be taken as final.

In April Intel was accused of using undercover operations to fight the pending lawsuit. It used a shell company, Maelan Ltd of the Cayman Islands, to challenge the ownership of the patent arguing that TechSearch had paid Meta Systems too little for the patent and the transaction should be voided. TechSearch became suspicious and eventually Intel admitted that it owned Maelan and was reprimanded in court.

Intel maintains that the case is without merit. Anthony M Brown, president of TechSearch, says that the company will be looking for damages of between $2bn and $8bn from Intel. The trial is set to take place in San Francisco in January next year. á