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May 29, 1997updated 05 Sep 2016 1:06pm

INTEL STRIKES BACK: COULD STOP SUPPLYING DEC

By CBR Staff Writer

Fighting fire with fire, Intel Corp has begun its own legal proceedings against Digital Equipment Corp, demanding DEC return to it information and products the Maynarder is using to develop systems based upon Deschutes, a speedier version of the recently- introduced Pentium II processor that’s expected to ship next year. If Intel wins, it would likely put DEC months behind other manufacturers who are also building systems using advance information from Intel. The more important implication is that DEC might lose access to future Intel technology entirely. DEC can hardly afford that, as it already sells more systems based upon Intel chips than its own Alpha RISC, although it has said it will begin to use the Pentium II-compatible K6 series parts from Advanced Micro Devices Inc (CI No 3,149). Contractually, Intel is obligated to supply DEC with Pentium, Pentium Pro and Pentium II products only until the end of next quarter. Intel negotiates supply contracts on a quarterly basis with its partners. It admits it has a separate arrangement for supplying other pieces of technology to DEC through 1999, but that does not include Pentium generation chips. Intel wouldn’t say whether it would stop supplying DEC with chips and observers say that in any case there might be anti-trust implications if it were to do so. Intel says it has asked DEC to return documents transferred to it since 1991 under a non-disclosure agreement. When you are being sued for patent infringement the prudent thing to do for shareholders is to recover [Intel] intellectual property from the party that is suing you. Intel has provided DEC and other system builders with prototype designs and a ‘Deschutes Yellow Book’ which lists properties and requirements of the processor. In reply, DEC described Intel’s lawsuit as without merit and unjustified but that it had expected it. Intel’s suit comes 14 days after DEC charged Intel with stealing intellectual property for use in the design and development of its Pentium generation microprocessors. DEC went on to say that the counter suit is nothing more thin a thinly veiled attempt to cause concern amongst DEC customers. DEC shares closed down $1.25 at $36.00; Intel stock dipped $2.18 at $167.12.

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