Intel revokes Via's chipset license, files lawsuit

In a move that seems likely to resurrect accusations that Intel is trying to stifle competition, the chip giant revokes a technology license and files a federal lawsuit against Via Technologies, a leading chipset vendor.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
3 min read
In a move that seems likely to resurrect accusations that Intel is trying to stifle competition, the chip giant has revoked a technology license and filed a federal lawsuit against Via Technologies, a leading chipset vendor.

And, once again, Rambus may come up somewhere as an issue.

On Wednesday, Intel filed a breach-of-contract and patent-infringement suit against Via Technologies alleging that it is marketing Intel technology that is excluded from a license to the two companies signed last November.

"Via continues to mislead customers and prospective customers to believe that unlicensed Via chipset products are licensed to Intel's patents under the agreement," the lawsuit alleges. It seeks an injunction barring the practice as well as unspecified monetary damages.

A chipset is a group of companion chips to the main processor and together they form the electronic core of a computer.

The suit was preceded by a revocation of the license on June 18, according to an Intel spokesman. Earlier in the month, Intel filed a breach-of-contract suit against Via, but withdrew it because of a technical error.

At issue in the case is whether or not Via, which supplies chipsets to a number of computer vendors, went beyond the bounds of its licensing agreement in the marketing or manufacture of its chipsets.

The complaint does not identify the offending chipsets. However, Dean McCarron, principal analyst at Mercury Research believes the suit could involve two of Via's chipsets.

The first product is an integrated chipset for low-price Intel-based PCs that combines a standard chipset with a graphics component from Trident Microsystems. Under its arrangement with Trident, Via markets the chipset to desktop customers, while Trident markets it to notebook makers. The legal problem: Because Trident does not have an Intel license, Trident's marketing efforts constitute a violation of the agreement, McCarron said.

The chipset has not met with substantial market acceptance, but McCarron theorized that Intel would rather not have it around. Intel recently released its first integrated graphics chipset, the 810. Via's solution "will ultimately compete with the 810," he said.

In addition, Via is working on a chipset that will contain a 133-MHz system bus and support 133-MHz memory, which presents a more interesting problem. With this chipset, PC makers could build faster systems (currently most Intel systems use a slower 100-MHz bus), and adopt the new memory technology.

Intel does not have such a product coming out.

The faster memory from Via may also negatively impact Rambus, another memory architecture which offers the best performance but higher costs too. Executives at various computer companies have stated that they are not eager to quickly adopt the more expensive Rambus memory, especially with standard memory at such low prices.

Intel does not have a chipset that supports 133-MHz memory. Rather, its upcoming chipsets support slower 100-MHz memory or Rambus.

In addition, the Via chipset presents Intel with a marketing problem. Because Via slated it for release this summer, it would have given the small company the product lead over Intel.

Nearly every motherboard maker at Computex trade show in Taipei earlier this month displayed motherboards with a Via chipset using the faster memory chips.

A source close to Intel discounted the idea that memory support is the main issue in the lawsuit. McCarron said he does not know.

Ultimately, the lawsuit may not hurt Via's relationships with large PC companies, but it may scare some smaller second and third tier companies away.

"It doesn't help when you are trying to sell to a customer that is sensitive about IP (intellectual property) issues," he said.