Transmeta sues Intel for patent infringement

Suit claims that Transmeta's intellectual property is embodied in $100 billion worth of Intel chips.

Transmeta, the chip designer that once tried to take on Intel in the notebook market, is suing Intel for patent infringement.

Santa Clara, Calif.-based Transmeta alleges that Intel violated 10 of its patents and that the intellectual property behind these patents is embodied in $100 billion worth of chips sold by Intel. The claim extends back to the P6 generation of chips, which includes the Pentium Pro and Pentium II, and forward to the latest Core 2 Duo processors.

The case was filed Wednesday in a U.S. District Court for the District of Delaware.

The patents relate to power efficiency. Transmeta alleges that Intel infringed on one of its patents when it inserted a technology called "enhanced SpeedStep" into its models, said John Horsely, Transmeta's general counsel. Enhanced SpeedStep essentially slows down a chip when not in use to cut power consumption.

Other patents relate to things like instruction scheduling and other microarchitecture issues. Transmeta's patents were filed over a 10-year period, starting in 1991 (which predates the Pentium Pro) and going through 2000. Horsely said the suit is not barred by the statute of limitations.

Transmeta was the first company to emphasize that power consumption was going to be a major headache for chip and computer makers. It claimed that its Crusoe processors would be able to run the same software as Intel chips, but gobble up less electricity, thus leading to longer battery life.

Although the company landed early deals with Sony and Fujitsu when Crusoe arrived in 2000, it did not live up to its goals. Crusoe's performance was middling, and Transmeta had several problems getting new versions out the door. Deals with Toshiba and others evaporated.

The chipmaker then went through several rounds of layoffs and changed its CEO three times before refashioning itself into an intellectual property firm last year.

Transmeta has regularly lost millions of dollars a year. Between January 1998 and June 2005, it posted accumulated losses of $635 million on revenue of $134 million.

Although the chips never sold well, Transmeta's ideas did spark Intel to look more closely at power consumption. Getting inspiration and patent infringement, however, are two separate things.

Intel, also based in Santa Clara, declined to comment, stating that it has not seen the complaint yet.

Unlike other x86 vendors, Transmeta never had a patent license from Intel. AMD or National Semiconductor, who made x86 chips at that time, did have a license. At the time, some expected Intel to file suit against Transmeta.

Horsely and Transmeta CEO Art Swift would not comment on whether the company would sue PC makers that incorporated Intel chips into their products. Horsely also declined to say whether Transmeta would sue AMD. That chipmaker has a license for "some" Transmeta technology, Horsely said.

Although Intel is one of the more prolific companies when it comes to obtaining patents, it has found itself a defendant in several intellectual property suits in the last few years. Most times, the cases have been started by companies that are struggling. Intergraph brought suits against Intel and ultimately settled for $675 million. Patriot Scientific, a chip company with only a few employees, has also sued Intel.

In addition, MicroUnity, a hot start-up in the late '80s that had dwindled to obscurity, sued Intel a few years ago. In 2005, Intel settled the case by paying MicroUnity $300 million.

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