AMD and Intel cross swords over cross licensing agreement

Advanced Micro Devices Inc. on Monday said rival Intel Corp. is threatening to end a patent cross license agreement between the two rivals over allegations that the creation of GlobalFoundries violates the terms of the deal. (See: AMD spins off manufacturing operations; names new chairman)

AMD said Intel sent the company a letter accusing it of violating the terms of 2001 deal when it recently created GlobalFoundries by spinning off its front-end operations, according to a filing with the Securities and Exchange Commission.

AMD has claimed for some time that the spin-off, while retaining a noticeable share directly in the new entity, did not breach the conditions of the 2001 pact with Intel. Intel has previously cautioned AMD over the manufacturing spin-off but had not made clear its possible intentions should the spin-off actually take place.

AMD said Intel is threatening to end the deal within 60 days unless the alleged breach has been corrected. AMD rejects Intel's claims, saying, "The company strongly believes ... that Intel has no right to terminate the company's rights and licenses" under the agreement.

The Sunnyvale, California chip maker also fired back, arguing that "Intel's purported attempt to terminate the company's rights and licenses" is also a breach of the agreement which gives AMD the right to terminate Santa Clara, California-based Intel's rights and licenses.

In an email to the press, AMD noted that the Intel action was 'an attempt to distract the world from the global antitrust scrutiny it faces.  Should this matter proceed to litigation, we will prove not only that Intel is wrong, but also that Intel fabricated this claim to interfere with our commercial relationships and thus has violated the cross-license.'