Intel to pull x86 cross-licensing agreement with AMD in 60 days
Business and Law Features

Intel to pull x86 cross-licensing agreement with AMD in 60 days

Sunnyvale (CA) - AMD filed a Form 8-K today with the SEC stating Intel notified the company of plans to pull its 2001 cross-licensing agreement for x86-related patents within the next 60 days unless the smaller chipmaker can address Intel's concerns over its chip foundry business.

Intel and AMD have enjoyed a long-standing cross-licensing agreement for all x86-developed technologies. Dating back to 1976 when AMD was chosen to be a second-source supplier of computer chips for IBM, the two companies have been free to utilize all extensions and enhancements to x86 technology made by either company.

For example, in 1976 the only CPU available was the 8088 and 8086 16-bit microprocessors. Soon after the 80186 was developed (which was not a commercial success outside of embedded apps due to certain interrupt features being hard-wired), followed by the far more successful 80286. This was the last 16-bit-only CPU made by either company as the 80386 expanded the CPU to 32-bits, introducing such amazing desktop PC concepts as virtualized memory spaces, memory pages, and protected mode operations where at a hardware level all aspects of every process were completely isolated from every other one on the system (prior to the 80386, it was possible to multi-task on any CPU; however, any failing program could take down the entire machine. With the 80386's hardware advancements, failing programs no longer needed to take down the entire machine, though the extent of the failure and the OS's ability to recover were dependent upon coding practices and not hardware limitations).

Following the 80386 came the 80486, and then Pentium (which was not delivered unto the world as 80586 because Intel lost a lawsuit which stated they could not patent numbers -- Intel chips had been known as i386 and i486, a numbering system which other companies were copying). The Pentium Pro introduced out-of-order execution, focusing primarily on 32-bit code for the first time (all previous 32-bit capable CPUs were focused primarily on running 16-bit code very fast, and with the Pentium Pro, 16-bit code execution speed suffered). Then came Pentium II, extensions like MMX, SSE, Pentium III, Pentium IV, SSE2, and so on. During that time AMD introduced its 3D Now! set of extensions as well, which expanded upon the MIMD model provided for in MMX, SSE and derivatives.

When AMD introduced its 64-bit x86-64 architecture (now called AMD64), the company was introducing an x86-extension alternative to Intel's proprietary 64-bit technology, which was called Itanium. AMD did not have cross-licensing agreements in place with Intel to produce Itanium and could not compete in that arena as the die size of early Itaniums was 474 square millimeters (the average die size of a similar timeframe Athlon CPU was 130 square millimeters). AMD also saw a huge opportunity for expanding x86-32 into the 64-bit world as there was already a huge x86 code base out there. Itanium used a new EPIC instruction set and required a completely new set of tools for developers.

AMD sized up the situation and both had the desire and was basically forced into developing the 64-bit AMD64 technology, which Intel later copied and introduced as EM64T despite early claims that they would not produce the x86-64 extension, later learned to be codenamed Yahmill.

Agreements made it possible

All of these extensions to the x86 architecture, from 8086/88 to modern 64-bit CPUs including virtualization extensions, those produced by both AMD and Intel, have all been made possible due to the x86 cross-licensing agreements, last updated in 2001 and set to expire in 2010.

In late January, Intel had asked AMD to sit-down meeting over the not-yet-spun-off ATIC manufacturing company, referred to as The Foundry Company, and now called GlobalFoundries. In that meeting Intel was looking to determine the extent to which the spin-off would affect its cross-licensing agreements. And as of today, according to AMD, Intel remains unsatisfied.

An AMD filing made with the Securities and Exchange Commission this morning states the following:

Advanced Micro Devices, Inc. (the “Company”) has received correspondence from Intel Corporation (“Intel”) related to the 2001 Patent Cross License Agreement between the Company and Intel (the “Cross License”). In this correspondence, Intel (i) alleges that the Company has committed a material breach of the Cross License through the creation of the Company’s GLOBALFOUNDRIES joint venture and (ii) purports to terminate the Company’s rights and licenses under the Cross License in 60 days if the alleged breach has not been corrected. [Our bolding. -Editor]
The Company strongly believes that (i) the Company has not breached the terms of the Cross-License and (ii) Intel has no right to terminate the Company’s rights and licenses under the Cross License. Under the terms of the Cross License, there is an escalating procedure for resolving disputes, and the Company has commenced the application of that procedure with respect to Intel’s purported attempt to terminate the Company’s rights and licenses under the Cross License. In addition, the Company has informed Intel that the Company maintains that Intel’s purported attempt to terminate the Company’s rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel which gives the Company the right to terminate Intel’s rights and licenses under the Cross License Agreement while retaining the Company’s rights and licenses under the Cross License Agreement.
AMD claims that Intel has no foundation for their claim and that they have not breached the terms of the Cross-License agreement. AMD is now escalating the issue as is provided for in the agreement, stating also that it is, in fact, Intel who is in material breach of the agreement by stating that AMD is in material breach.

Opinion

Let the games begin. For a humorous take on these events, visit Clara County: x86 cross-license dispute.