Updated on March 27 at 8:15 a.m. PST with comments from analyst.
On Thursday, Nvidia announced that it filed a countersuit against Intel in response to a filing by Intel last month alleging that a chipset license agreement does not extend to Intel's future-generation processors.
The action also seeks to terminate Intel's license to Nvidia's patent portfolio.
Last month, Intel alleged in a lawsuit that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated" memory controllers, such as its Nehalem processor.
"Nvidia did not initiate this legal dispute," said Jen-Hsun Huang, president and CEO of Nvidia, in a statement. "But we must defend ourselves...Intel's actions are intended to block us from making use of the very license rights that they agreed to provide."
Nvidia entered into the now-disputed agreement in 2004. In return, Intel took a license to Nvidia's portfolio of 3D, GPU, and other computing patents, according to the Santa Clara, Calif.-based graphics chipmaker. Nvidia said it had been attempting for more than a year to resolve the disagreement with Intel.
Nvidia said last month that Intel is claiming that the cross-license agreement doesn't apply to future bus interfaces, specifically the interface Intel uses to link the Nehalem processor to the system's memory, a new Intel feature.
Nvidia believes that the PC has become a GPU-based platform as much as a CPU-based platform and that Intel is trying to delay that inevitable shift by using the courts. (CPU stands for central processing unit; GPU stands for graphics processing unit.)
In a research note Friday Doug Freedman of Broadpoint AmTech said: "We are not surprised by NVDA's (Nvidia's) counter-suit against INTC (Intel) over chipset licensing of Nehalem's front side bus (FSB). We believe Intel's intent is not to prevent NVDA from using Nehalem FSB, but to use litigation as leverage for obtaining necessary IP/cooperation from NVDA (even possibly seeking IP in support of its non-PC SoC initiatives)." (IP stands for intellectual property; SoC stands for system-on-a-chip.)