Court Keeps Intel Lawsuit In Alabama

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May 20, 1998 (12:00 AM EDT)

By Eric Hausman,

A federal court has denied Intel's request for a change of venue from Alabama to California in the lawsuit filed against Intel by Intergraph.

In a lawsuit filed Nov. 17, 1997, in the U.S. District Court, Northern District of Alabama, Intergraph alleged that Intel is using its dominant market position in an attempt to coerce the workstation manufacturer into giving up certain key patent rights.

The court also has set June 18 as the date to meet with both parties to establish a time line for the case.

Commenting on the latest developments, Intergraph CEO Jim Meadlock said, "We're pleased that the case will remain in the Alabama federal court. Now with the venue determined and a scheduling conference set, we can quickly move forward with the case."

Intergraph officials also said they were pleased with last week's decision to deny Intel's request for an expedited appeal. "Intel described the preliminary injunction as extreme and harmful to them, but obviously the court didn't agree. What was harmful was Intel's refusal to provide us with the advanced information and chip samples necessary for us to remain competitive," said Meadlock.

Intel's legal troubles will officially fall on the shoulders of Craig Barrett. As of today Barrett, Intel's president, will take the helm from CEO Andy Grove, who will remain chairman.

Barrett takes over the company as Santa Clara, Calif.-based Intel (company profile) faces a spate of troubles. The chip giant last month reported its worst financial performance in 10 years and, as a result, will lay off 3,000 workers. In addition, Intel faces decreasing profits as consumers move to sub $1,200 PCs. And Intel's dominant share of the chip market (80 percent) also has caught the eye of the Federal Trade Commission, which is investigating the possibility of antitrust litigation.

In early Wednesday trading, Intel shares were off nearly 2 percent to $78 per share.