In the suit, Toronto-based All Computers alleges that Intel's Pentium processors violate an All Computers patent related to the way high-speed microprocessors operate.
In addition to compensatory damages, All Computers is seeking a permanent injunction to stop the chipmaker from shipping any processors or other chips that contain or work with the circuitry protected by the patent, said Edward O'Connor, the company's lawyer.
"We believe the suit is without merit and plan a vigorous defense," Intel spokesman Chuck Mulloy said in an e-mail.
The suit is one of several recent disputes involving Intel chips and customers. In April, Patriot Scientific, a small San Diego semiconductor design company, to 150 companies, telling them that they might be infringing on one of its chip patents because of their use of Pentium chips that run at speeds faster than 120MHz.
Patriot has alsoagainst five companies, including Japanese PC manufacturers Fujitsu, Matsushita Electric, NEC, Sony and Toshiba, alleging that they infringed the Patriot patent by selling computers that, again, contain Pentium chips that run at 120MHz or faster.
Patriot alleges in the letters and the suits that the companies are violating a patent for technology related to the way high-speed processors keep time. Patriot claims that its intellectual property has been incorporated into $150 billion worth of chips.
Intel has said it also believes that Patriot's claims are invalid.
The chipmaker, however, has settled other patent disputes. Intel has agreed to pay Intergraph, a one-time manufacturer of computer workstations, a total of $675 million to settle a that alleged that Intel Itanium and Pentium chips violated patents for Clipper, a processor developed by Intergraph.
The All Computers patent in question is U.S. patent No. 5,506,981, titled "Apparatus and Methods for Enhancing the Performance of Personal Computers." It was awarded in 1996. The patent describes circuitry necessary for high-speed processors to communicate with other elements of a computer, O'Connor said.
He said the patent could also apply to other processors and the products that contain them, raising the possibility for other patent suits by All Computers.
The company offered to license the patent to Intel, but O'Connor said All Computers did not hear back from the chipmaker.
All Computers, which has sold products such as a card designed to enhance PC memory, was founded in 1971 by Mers Kutt. Kutt introduced the MCM-70, an early personal computer, All Computers said in a statement.