Intel And FTC Battle Over Trial Date, Scope

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July 10, 1998 (12:00 AM EDT)

By Darryl K. Taft,

At Friday's scheduling conference in the Federal Trade Commission's case against Intel, both sides proposed trial start dates and argued what key points the case should contain.

Intel (company profile) requested the trial begin in February, while the FTC requested a Dec. 7 start. FTC attorney John Horsley said the federal agency should wrap up its case three weeks after the start date.

With three weeks for Santa Clara, Calif.-based Intel to present its case, the trial could end in about seven weeks, said the FTC's chief administrative law judge, James Timony. That would put the end of the trial around Feb. 18, which is the date Intel proposes the trial begin.

Robert Cooper, an attorney with the Los Angeles law firm of Gibson, Dunn & Crutcher, which is representing Intel, requested a February start for the trial because of another case he must argue that begins Sept. 8 and is expected to run through November.

In addition, Cooper said the Intel case will involve vast amounts of technical information that could take some time to digest and to present for the court.

"Our concern is not so much the trial," Cooper said. "My larger concern is having the time to pull the case together completely before the trial. We think we're going to have to race to get this case together on just the microprocessor issue, but if they expand it to other issues such as 'microprocessor-related' technology," it could take a year, Cooper said.

"In addition to preparing a full case and a very difficult case, we'll be dealing with technical issues and competitive issues, price trends, OEM [original equipment manufacturer] relationships, the history of innovation, and business justifications for the actions we've taken vis-a-vis the three companies [Digital Equipment, Intergraph, and Compaq]," Cooper said.

In a broader issue, more key to the case itself, Intel argued the FTC's use of the term "microprocessor-related" markets in its complaint against the company could extend the case or lead to cause for dismissal. Cooper said it could extend the case because it would require Intel to gather a lot more evidence to prepare a case that might get into graphics controllers, graphics accelerators, and chip sets.

In addition, a focus on microprocessor-related markets could be cause for dismissal because the FTC is investigating Intel in regard to its involvement in the graphics controller and chip set markets. Cooper said there are two separate investigations ongoing into Intel's business in these areas, "and they won't give us what they have."

Horsley confirmed Cooper's assertion about the investigations, but said the FTC does not intend to argue its case based on microprocessor-related issues. "This case is about Intel's monopolistic behavior in the microprocessor market," he said.

Cooper said the case turns on "whether the charges, the actions we took chilled innovation in the market."

Cooper added that Intel will be raising a number of patent issues in its defense. He said if Intel can prove its patent strategy, then the government's case becomes moot. However, when asked by Judge Timony if he felt this was a patent case, the FTC's Horsley said, "We do not think so, your honor."

Horsley added that Cooper "elaborated their so-called patent defense, but the nature of the disputes and of the arguments ... it's extra-judicial, non-patent basic commercial retaliation."