Via Executive: Suit Shows Intel Is Worried

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May 20, 1999 (4:33 PM EDT)

By Jack Robertson and Mark Hachman,

Two weeks after Intel withdrew its lawsuit against chip set maker Via Technologies, executives at Via are still bitter about the action taken by the chip maker.

"I believe Intel is really worried, and the lawsuit was meant to intimidate us and perhaps OEM customers," said Dean Hays, vice president of marketing for VIA, at the company's U.S. subsidiary in Fremont, Calif. "It was totally off base, because our Intel license definitely covers any VIA chip set that might be of concern to Intel."

Intel had filed a breach-of-contract suit against VIA, chargingthe Taiwanese company with trying to sell an unlicensed logic chip set, according to court documents filed in San Jose, Calif.

On the same day the lawsuit was filed, Intel withdrew it. The Santa Clara, Calif. company has consistently refused to talk about its surprising legal flip-flop, except to say that the suit against VIA was mistakenly issued by its outside counsel.

Intel's perplexing action in filing and then immediately withdrawing the VIA suit comes just after the chip maker had settled an antitrust case with the Federal Trade Commission over earlier licensing disputes with Compaq Computer, the former Digital Equipment, and Intergraph.

Some industry observers pondered if Intel's admitted "mistake" in filing the VIA lawsuit involved second thoughts on how this action might affect the just-concluded FTC settlement.

A copy of the withdrawn VIA suit revealed that Intel had wanted a restraining order against VIA selling unspecified chip sets using Intel technology that allegedly had not been licensed to the Taiwan company.

Hays said all of Via's current and upcoming chip sets that connect to Intel's Celeron and Pentium processors are covered by the license agreement.

Hays also said the license includes the upcoming VIA integrated chip set using Trident Microsystems' graphics accelerator core that will compete head on with Intel's integrated chip set also using Trident technology.

Hays speculated that Intel might be upset with VIA's imminent chip set connecting PC133 SDRAM memory with Intel processors, since the microprocessor giant is doing all in its power to head off PC133 in favor of Direct Rambus DRAMs

The Intel complaint didn't identify the specific VIA chip sets in question, but the suit said VIA "began in February and March, 1999 demonstrating the chip sets to OEMs and providing samples to OEMs for evaluation purposes, and informing OEMs that the chip sets would be available for delivery in the third quarter of 1999."

That could describe either the projected VIA PC133 or integrated Trident graphics chip sets for Intel's Celeron and Pentium processors.

Hays said VIA had specifically obtained the Intel license to let it offer the PC133 and integrated graphics chip sets without any legal question. "We could have simply gone to any of a number of semiconductor firms that have cross-licensing agreements with Intel and had them make the chip sets for us under their Intel license," he added.