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Setback for Intel in Intergraph suit

A federal court denies an expedited appeal of a ruling that Intel must resume selling chips and providing proprietary information to Intergraph.

A federal appeals court today denied Intel's request for an expedited appeal of a lower court decision ruling that the chip giant must resume selling microprocessors and providing proprietary information to Intergraph.

The decision, issued today by the U.S. Court of Appeals for the Federal Circuit, is a routine step in a case that coincides with a Federal Trade Commission investigation into Intel's business tactics.

"We anticipated that this would happen," said Intergraph chief executive Jim Meadlock. "I assume this [appeal] is a six-month process."

Intel said it was encouraged by language in the brief ruling that suggests the appeal will go ahead quickly. "The court essentially said, 'We'd like you to just file your brief as soon as you can and we'll hear it as soon as we can,'" according to an Intel spokesman.

"We expect to file next week. We would expect that we may be in a hearing by late this summer," the spokesman said.

Normally, Intergraph would have 40 days to respond to Intel's filing.

Last year, Intergraph filed a federal lawsuit against Intel alleging that the Santa Clara, California, company cut off its supply of microprocessors because it refused to license Intel its "Clipper" technology. (Intel is an investor in CNET: The Computer Network.)

In an April 13 preliminary injunction, a federal district court in Alabama said that under the so-called doctrine of essential facility, Intel must deal with Intergraph in the same way it deals with other workstation vendors. That is, arbitrary behavior by the industry's predominant supplier of microprocessors illegally undermines Intergraph's trade, and therefore Intel cannot simply cut off chip shipments.

The district court's proceedings brought to light evidence that seems to support the FTC's line of inquiry. Among other things, Intergraph testified that its refusal to grant Intel a free license to the Clipper technology resulted in Intel's threatening to cease entering into nondisclosure agreements (NDAs) with Intergraph.

Intergraph has been working with the FTC on a weekly basis, as the agency is contemplating a suit revolving around issues similar to those raised in the current case, the company has said.

Intel continues to deny the merit of Intergraph's suit but said it remains open to a negotiated settlement. Such a resolution could relieve the impetus of some of the FTC's claims.

Senior writer Michael Kanellos contributed to this report.