Intel goes after EMI for "parasitic" suit

Intel today sued EMI Group North America for malicious prosecution relating to a 1995 patent infringement claim the tiny company carried all the way to the U.S. Supreme Court before losing.

Intel's suit seeks $4.5 million in addition to unspecified punitive damages, alleging that EMI's "parasitic" infringement suit was designed to "coerce Silicon Valley companies to make payments simply to avoid the risk, uncertainty, burden, and expense of litigation."

EMI's lawsuit against Intel ultimately was quashed earlier this year, but it nonetheless cost the chipmaker millions in legal fees, the suit alleged.

Representatives from EMI could not immediately be reached for comment.

Peter Detkin, Intel's associate general counsel, said today's lawsuit is designed to send a message to companies like EMI.

"It's a case that should never have been filed in the first place," Detkin said in an interview with CNET News.com. "This [suit] is about Intel, but [EMI] continues to threaten a whole bunch of other companies."

EMI, a Wilmington, Delaware-based company that Intel describes as a "shell corporation that does not manufacture, develop, or produce any product or service," sued Intel in federal court in its home turf for patents that cover a method for fabricating metal oxide semiconductor transistors. Two months later, officials from both companies met, and Intel allowed EMI's expert to review blueprints for designing its chips, according to today's suit. EMI bought the patents from another company.

The expert "confirmed that the Intel parts which EMI had analyzed did not infringe the patent" at issue in the suit, Intel attorneys argued. "EMI was thus left in a situation where it had brought a lawsuit on grounds which clearly and admittedly were erroneous."

Despite the meeting, however, EMI said it would not drop the claims unless Intel paid it $60 million, Intel's suit alleges.

"After over four years of litigation, which Intel won at both the trial and appellate levels, the United States Supreme Court rejected EMI's claim, and EMI's parasitic lawsuit was finally over," Intel's lawsuit argues. "In the interim, however, Intel incurred enormous burden and expense in order to defend itself from EMI's baseless claims of patent infringement."

EMI has targeted others
In addition to Intel, EMI allegedly also has targeted Advanced Micro Devices, Cypress Semiconductor, Winbond Electronics and Hyundai, according to the complaint.

The "deep pockets" of Silicon Valley companies makes them a favorite target for attorneys. The volatile stock prices of many of these firms make them especially vulnerable to stock fraud suits.

Frivolous patent infringement claims can also pose a problem, although to a much lesser extent, said Mike Ladra, an attorney at Wilson, Sonsini, Goodrich & Rosati, who represents large Silicon Valley firms.

"There are a number of what I term patent terrorists who wander around suing companies," Ladra said. "Intel's kind of a target for these kinds of things, because their sales are so large."

One of the most notorious patent plaintiffs was the late Jerome Lemelson, who sued hundreds of companies across the country for patent infringement on an array of patents. Even after Lemelson's death, his foundation last year sued Intel and 25 other semiconductor companies for patents covering their automated manufacturing processes. That suit is still pending.

While Lemelson had his detractors, he also had supporters. The Massachusetts Institute of Technology awards a major scientific prize named after Lemelson annually.