AMD: Change of control terminates x86 cross-license for both

KitGuru has a little update about the x86 cross-license deal between Intel and AMD. Drew Prairie, director of corporate communications at AMD, told the website that if ownership of either AMD or Intel changes, the whole agreement is terminated for both parties.

After a potential joint-venture, merger or acquisition by another firm, the companies would need to negotiate a new cross-licensing agreement. And because Intel also uses a lot of AMD IP in its processors, it doesn't really have another choice but to renegotiate the contract should something happen with AMD.

“Actually, the agreement is pretty clear – if there is a change of control for either company the agreement is terminated,” said Mr. Prairie. “That does not mean a new agreement could not be reached, but in a change of control the agreement is terminated.”

Many analysts believe that multiple companies and strategic investors hold off from acquiring AMD because without a cross-license agreement with Intel, the company can be sued by Intel for patent infringement, which could ultimately result in inability to sell x86-compatible processors . Moreover, without the cross-license agreement, AMD can sue Intel for patent infringement too. If AMD gets acquired and the agreement is terminated, Intel will have to either find a way to not use AMD’s IP (which is a rather hard thing to do) or ink a new deal.

The only scenario under which the cross-license agreement is terminated for only one party is upon a breach of contract.