Intel Corp has been accused of using undercover operations to fight a pending $500m patent lawsuit taken out against it last year. According to a report in the Wall Street Journal, Intel has been using a shell company, Maelen Ltd of the Cayman Islands, to try to invalidate the patent claim against it from a Chicago- based law firm, TechSearch Inc. TechSearch acquired the patents last year (CI No 3,466) from International Meta Systems Inc, currently the subject of bankruptcy proceedings in an Austin, Texas-based courtroom. Maelen was acquired by Intel in August 1998.
The main patent infringement case is set to take place in San Francisco later this year. But Intel Corp has been using its shell company to challenge the ownership of the patents during the bankruptcy proceedings. Without revealing its affiliation with Intel, Maelen represented itself as a supporter of International Meta shareholders, arguing that TechSearch had paid too little for the patents and that the transaction should be voided. Maelen offered the bankrupt company’s trustee $25,000 in seed money to help recover the patent, and then said it would bid a minimum of $250,000 for the recovered patent. The offer was represented as a way of getting back more money for the company’s creditors. TechSearch paid $50,000 for the patent, and promised 10% of what it recovered from enforcing the patent, after legal fees.
But TechSearch became suspicious of Maelen, and Intel eventually admitted its ownership in court. Judge Frank R Monroe reprimanded Intel for using this estate in an attempt to bring leverage upon TechSearch and the litigation in California. He also dismissed Intel’s claim that it was acting on behalf of IMS shareholders. I would submit that neither Maelen nor Intel gives a damn what this estate gets, he said. And TechSearch president Anthony Brown pointed out that Intel is arguing that the patents are worthless in the California case, and valuable in the Austin case. Intel responded by calling TechSearch a patent extortionist.
Back in 1994, International Meta caused some excitement when it emerged that Motorola Inc and Hewlett-Packard Co were both talking to it about using its x86-compatible hardware emulation technology for their RISC chips. At the time both companies were interested in running Microsoft Windows on their RISC-based systems. Both deals fell through, as did a later agreement to make Intel compatible parts in conjunction with SGS Thomson Microelectronics Inc. Today, International Meta’s technology sounds somewhat similar to that expected to come out of Sunnyvale, California-based Transmeta Inc.
