Intel has notified AMD that it believes the Globalfoundries deal violates a cross-license agreement with Intel. Among other things, this license gives AMD the right to make x86 processors and Intel believes the deal that spun off AMD's fabs breached a confidential portion of that agreement. The chip giant claims AMD has 60 days to resolve the dispute, otherwise the patent agreement will be pulled.
Intel Corporation today disclosed that the company has notified Advanced Micro Devices (AMD) that it believes AMD has breached a 2001 patent cross-license agreement with Intel. Intel believes that Global Foundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. Intel also said the structure of the deal between AMD and ATIC breaches a confidential portion of that agreement. Intel has asked AMD to make the relevant portion of the agreement public, but so far AMD has declined to do so. AMD's breach could result in the loss of licenses and rights granted to AMD by Intel under the agreement.
"Intellectual property is a cornerstone of Intel's technology leadership and for more than 30 years, the company has believed in the strategic importance of licensing intellectual property in exchange for fair value. However AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent," said Bruce Sewell, senior vice president and general counsel for Intel. We have attempted to address our concerns with AMD without success since October. We are willing to find a resolution but at the same time we have an obligation to our stockholders to protect the billions of dollars we've invested in intellectual property."
Under terms of the license agreement the notification to AMD means the parties will attempt to resolve the dispute through mediation. In response to the notification AMD claimed Intel breached the agreement by notifying AMD of its breach. Intel believes that position is inconsistent with the dispute resolution process outlined in the original agreement.
AMD reacts by stating that they strongly believe the cross-license patent agreement wasn't breached, because they view Globalfoundries as an AMD subsidiary. It's going to be an interesting battle, but it's extremely unlikely that Intel will cancel the deal because they are using a lot of AMD IP as well, including 64-bit extensions, integrated memory controller, and multi-core related patents.