Intel Corporation v Via Technologies Inc. and anp
| Jurisdiction | England & Wales |
| Judge | Mr Justice Lawrence Collins |
| Judgment Date | 14 June 2002 |
| Neutral Citation | [2002] EWHC 1159 (Ch) |
| Docket Number | HC 01 C 04135 HC 01 C 04136 HC 01 C 04136 |
| Court | Chancery Division |
| Date | 14 June 2002 |
[2002] EWHC 1159 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Lawrence Collins
HC 01 C 04135 HC 01 C 04136
HC 01 C 04135
HC 01 C 04136
Mr Nicholas Green QC and Mr James Abrahams (instructed by Bird & Bird) for the Claimants.
Mr Paul Lasok QC and Mr Jon Turner (instructed by Bristows) for the Defendants.
Approved by the Court for handing down
Hearing: April 11 and 12, 2002
| I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic. ………………………………………………………………………….. (Mr Justice Lawrence Collins) |
I Introduction
Intel is a Delaware corporation with its principal office in California. It is the world's largest designer and manufacturer of microprocessors for use in personal computers (PCs), under such brand names as Celeron, Pentium Pro, Pentium II, Pentium III and Pentium 4. The generic name for the microprocessors originally designed by Intel for use with PCs is the "x86." Intel also supplies other components including chipsets (whose function will be described below). VIA is a designer and manufacturer of PC components including chipsets, and it also manufactures microprocessors. It is incorporated, and has its principal office, in Taiwan. It was established in 1992, and has about 600 employees.
VIA claims that Intel has more than 80% of the worldwide market for x86 microprocessors, and 75% of the market for chipsets compatible with them. Intel has not given its own figures, but it accepts that it has a significant share of worldwide sales of x86 microprocessors. Its most significant competitor in the market for x86 microprocessors is Advanced Micro Devices Inc., which makes the Athlon microprocessor.
The frequency of major advances in the performance of computers is well known. In 1998 VIA was licensed by Intel to manufacture and sell chipsets using Intel's technology for use with Intel's Celeron and Pentium II processors. In 1999 Intel terminated the 1998 chipset licence agreement and brought proceedings for patent infringement against VIA.
In 2000 those proceedings were settled and, as part of the settlement, a revised chipset licence agreement was entered into extending VIA's licence to Pentium III-compatible products. Shortly afterwards, VIA made a complaint to the European Commission concerning Intel's allegedly anti-competitive licensing policies, and in particular concerning VIA's inability under the revised chipset licence agreement to make chipsets compatible with Intel's new Pentium 4. But the complaint was withdrawn in January 2002, and in May 2002 the Commission announced that it was not pursuing its investigation.
These two actions are in different ways related to the introduction by Intel of the Pentium 4 microprocessor. There are also proceedings between the parties pending in the United States (Delaware and Texas), Germany, Taiwan and Hong Kong. The second defendants in the Chipset action, Elitegroup Computer Systems (UK) Ltd, are motherboard manufacturers. The third defendants in the CPU action, Realtime Distribution Ltd, are distributors. In the Chipset action VIA claims for a variety of reasons that it is entitled to manufacture and sell chipsets compatible with the Pentium 4, even though the revised chipset licence agreement does not license VIA to do so. In the CPU action VIA claims that it can make use of Intel's modern Windows-compatible technology in manufacturing types of microprocessor for which VIA says there is consumer demand, and which, it says, Intel is replacing by the Pentium 4. These applications, which have been ordered to be dealt with separately from the infringement and validity issues, raise some important points of principle on the relationship between patent law and competition law, namely Articles 81 and 82 of the EC Treaty and the corresponding provisions in the Competition Act 1998 (the "1998 Act"), sections 2(1) and 18.
II Microprocessors and chipsets
The principal systems level components of a PC are these: first, the microprocessor, or Central Processing Unit (CPU), or "chip", which controls the operation of the entire computer system, and which executes the arithmetical and logical functions that make up computer programmes; second, "memory" or Random Access Memory (RAM), which stores data on a temporary basis, and to and from which additional data stored in permanent memory (such as a hard disk, floppy disk, CD-Rom etc) or received from outside the computer (such as when the computer is connected to a network, a modem, the Internet etc) are transferred as and when needed by the microprocessor; third, a "chipset" which is a group of microchip components; and fourth, the "motherboard" on which the above components are installed together with related components.
Data moves through the computer to the microprocessor along electronic pathways called "buses". A bus is the data path on the motherboard which connects the microprocessor with attachments such as hard disk drives, CD-ROM drives and graphics adapters. Different types of buses transfer data in a variety of formats and at different speeds. PCs typically include several types of bus. For the microprocessor, the most important bus is called the host bus. This is the pathway over which the microprocessor receives all the instructions and data necessary to execute a programme. Once the microprocessor has processed this data, it will send back along the same pathway the results of its processing. The other end of the host bus is connected to a group of microchip components called the chipset, and which comprise what are called the north bridge and the south bridge. The chipset determines which data from which source has priority use of the host bus, and will convert or "bridge" data received from a variety of bus types to the format used by the host bus.
The north bridge chip and the south bridge chip connect the microprocessor to the other devices, and are said to "interface" with them. The north bridge controls access to the host bus, and acts as the arbitrator and bridge between primary sources of data such as RAM and the video graphics sub-system. The north bridge must be designed to operate according to the same procedures as the microprocessor host bus. The north bridge is connected by another bus to the south bridge. The main role of the south bridge is to arbitrate and convert data received over a number of other bus types within the PC.
A microprocessor is of no use without a compatible chipset. This means that manufacturers of PCs must buy one chipset for each microprocessor purchased. Computer manufacturers normally (but not necessarily) buy these components from separate manufacturers and combine them with other components into a complete PC.
III The present proceedings
The Chipset action arises out of VIA's manufacture and sale of chipsets compatible with the Pentium 4. The patents in suit relate to a method and apparatus for transmitting signals over a wired-OR bus line and to protocols for buses that perform split/deferred/out-of-order transactions. In essence, the patents relate to the protocols by which the microprocessor communicates with the components with which it is connected. VIA claims that it is entitled to manufacture and sell chipsets compatible with the Pentium 4, even if they would otherwise infringe Intel's patents, for one or more of the following reasons:
(a) Intel's proceedings are an unlawful attempt to compel VIA to enter into a licence agreement containing cross-licences and restrictions on scope which are contrary to Article 81(1) of the EC Treaty and/or section 2(1) of the 1998 Act;
(b) Intel's refusal to grant a patent licence is an abuse of a dominant position contrary to Article 82 of the EC Treaty and/or section 18 of the 1998 Act;
(c) VIA is already licensed under the existing revised chipset licence agreement, because restrictions in that licence which might otherwise prevent VIA from manufacturing chipsets for the Pentium 4 are contrary to Article 81(1) and/or section 2(1).
In the CPU action, VIA claims that it is entitled to make its C3 series microprocessors with current Windows-compatible features (including Intel patented technology relating to graphics, switching between operational modes, and address access alignment checking). The C3 series is of the older Socket 370 type, which is the descriptive term for the way certain Intel microprocessors plug into a computer motherboard to make contact with the motherboard's built in wires or data bus. VIA says that Intel's refusal to license its technology is abusive for these reasons:
(a) it forms part of a plan to replace Socket 370 type microprocessors with the Pentium 4, notwithstanding a continuing demand for the Socket 370 type, and to force consumers to adopt a new and more expensive technology; and
(b) the rights relate to technology which constitutes an industry standard and competitors cannot otherwise access the x86 microprocessor market.
This judgment is given on applications (in accordance with directions given by Jacob J on December 21, 2001) by Intel to have these defences struck out as an abuse of the process, or for summary judgment to be given in its favour on the defence and counterclaim in each action.
IV The 1998 Chipset Licence Agreement
On November 24, 1998 Intel and VIA entered into a chipset licence agreement (the "1998 CLA"). The effect of the 1998 CLA was...
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