Intel Corporation v Via Technologies Inc. and anp
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery |
| Judgment Date | 20 December 2002 |
| Neutral Citation | [2002] EWCA Civ 1905 |
| Docket Number | Case Nos: A3/2002/1380; A3/2002/1381 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 December 2002 |
[2002] EWCA Civ 1905
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION, PATENTS COURT
MR. JUSTICE LAWRENCE COLLINS
Royal Courts of Justice
Strand,
London, WC2A 2LL
the Vice-Chancellor
Lord Justice Mummery and
Lord Justice Tuckey
Case Nos: A3/2002/1380; A3/2002/1381
Mr. Jonathan Sumption QC and Mr. Jon Turner (instructed by Messrs Bristows) for the Appellant (Via Technologies)
Mr. Nicholas Green QC and Mr. James Abrahams (instructed by Messrs Bird & Bird) for the Respondents (Intel)
Introduction
The Claimant ("Intel") designs and makes microprocessors or central processing units ("CPUs") for use in personal computers ("PCs") under the well known brand names such as Pentium and Celeron. It also makes chipsets for use in PCs. The first defendant ("Via") also makes CPUs and chipsets for use in PCs. Intel and Via are competitors in the world wide market for such components though it is Intel which, by a wide margin, enjoys the dominant position in that market.
On 27th September 2001 Intel instituted two actions in the Patents Court ("the Chipset Action" and "the CPU Action") alleging that Via was infringing five of Intel's patents by various acts in relation to Via's CPUs or chipsets. On 12th December 2001 Via served its defence and counterclaim in each action. It denied the validity of each of the patents relied on and denied that it had infringed any valid claim in any of them. In addition it raised defences under Articles 81 and 82 of the EC Treaty and the corresponding provisions of Competition Act 1998. So far as they remain material they are that, in the Chipset Action,
(a) Bringing these proceedings is an abuse by Intel of the exercise of intellectual property rights and/or Intel is estopped or otherwise precluded from obtaining the relief sought in these proceedings;
(b) The refusal of Intel to grant a licence to Via either at all or on lawful or reasonable terms is an abuse of a dominant position and Intel is not entitled to the relief sought;
and, in the CPU Action,
(c) The refusal of Intel to grant a licence to Via either at all or on lawful or reasonable terms is an abuse of a dominant position and Intel is not entitled to the relief sought;
(d) Intel's refusal to licence Via in respect of the patents in suit is abusive because it forms part of a plan to withdraw from the market certain products for which there is a continuing demand, and to force consumers and users to adopt a new and more expensive technology.
On 21st December 2001 Jacob J ordered that the actions should be tried in three stages, namely the Chipset Action Patent Issues, the CPU Action Patent Issues and the Competition Issues in both the Chipset Action and the CPU Action. They were fixed to be heard in December 2002, February 2003 and, subject to Intel's application for, amongst other relief, summary judgment in respect of the Competition Issues, May 2003 respectively.
Intel's applications for summary judgement under CPR Rules 3.4(2) and 24.2 were heard by Lawrence Collins J in April 2002. By his order made on 14th June 2002 Lawrence Collins J awarded Intel summary judgment on each of the competition issues. He gave Via permission to appeal in the Chipset Action in relation to part of issue (a) but refused permission to appeal in relation to all other competition issues in the Chipset Action and all competition issues in the CPU Action. By its appellant's notice issued on 28th June 2002 Via appeals from the order of Lawrence Collins J to the extent that he gave it permission and seeks permission to appeal on all but one of those for which permission was refused. We heard full argument from both Intel and Via on all such issues whether or not permission to appeal had been granted.
The Facts
The CPU is the component of a PC which executes the arithmetical or logical functions that make up a computer programme. The Chipset is a group of microchips which determine which data, from which source and in which order the CPU is to process. Random Access Memory ("RAM") is the main memory storage device for the data required to be processed. A bus is an electronic pathway by means of which the various components of a PC communicate with one another. The bus between the CPU and the Chipset is called the host bus. The CPU, Chipset, RAM and host bus, together with many other components, are fixed to the motherboard. One of the attachments by which CPUs are fixed to the motherboard is called "Socket 370".
In about 1981 IBM introduced its PC on an open architecture basis, that is to say publishing its specification and encouraging other manufacturers to make similar PCs. The CPU in the IBM PC, called the 8086, was made by Intel, a Delaware Corporation. Successive generations of the CPU, 186, 286, 386 and so on are described collectively as x86 CPUs. The x86 CPUs have been made and sold by Intel to IBM and other makers of PCs under the names such as Celeron and Pentium. The operating software used by the IBM PC was made by Microsoft. It too has gone through a number of subsequent generations, such as Windows 3.x, Windows 95 and Windows 98. It is important that subsequent generations of CPU and operating software should be compatible with earlier generations and each other. Thus all of them must be able to respond to what is called "the x86 instruction set".
It is the basic complaint of Via that in recent years the open architecture of the early PCs has been transformed by Intel into a proprietary system. Via suggests that this has been done by patenting the standard conventions relating to how a PC operates whereby components and software made by one producer are compatible with those of others. The effect, so it is suggested, is that a manufacturer such as Intel can prevent a rival from making its own components compatible with those of Intel thereby limiting the production of independent technology. This, it is contended, is what Intel seeks to do in the Chipset Action and the CPU Action because the patents in suit relate not to the overall design of a CPU or Chipset but to specific features of them which interact with other components. Thus, the two patents in suit in the Chipset Action relate to the protocols which enable the CPU to communicate with the Chipset in a way each will understand. The three patents in suit in the CPU Action relate to the conventions or protocols which enable the CPU to interact with the operating software, almost invariably a version of Windows.
As I have indicated, Intel was incorporated in the State of Delaware, USA. It is the largest designer and maker of x86 CPUs in the world, accounting for about 80% of sales for each year between 1996 and 2000 (both inclusive). It also makes Chipsets for use with its x86 CPUs. For the years 1996 to 1998 (both inclusive) its Chipsets accounted for about 100% of the market. Between 1998 and 2000, its share of the world-wide market in Chipsets declined to about 75%. Of the remaining 25% about 19% was picked up by Via.
Via is a company incorporated in Taiwan. It was established in 1992 and has about 600 employees. It designs and makes components for PCs. On 24th November 1998 it entered into a Chipset Licensing Agreement with Intel ("the CLA") regulating the terms on which it could use the patents of Intel in the design and manufacture of its own chipsets for use with the Celeron and Pentium II CPUs made by Intel. One of the terms on which it got the licence from Intel was that it should grant to Intel a licence in relation to its own patents. In 1999 Via acquired the business of Cyrix Technologies. It then started or expanded its production of CPUs.
In June 1999 Intel purported to terminate the CLA. It contended that Via had broken its terms in using the licensed technology. Intel instituted proceedings against Via in the US, Singapore and England. These proceedings were settled in June 2000. Via entered into a revised CLA ("the Revised CLA") with Intel extending the licence granted by the CLA to cover new products. A number of issues were referred to an arbitrator. The award was given in February 2001. The arbitrator concluded that Via had not broken the CLA but, in purporting to terminate it without sufficient cause, Intel had. As the result of the arbitration, the licence was made reciprocal in its scope, each party being permitted to make chipsets using the other's licensed technology.
On 12th September 2000 Via complained to the EC Commission that Intel was refusing to license its patents to Via so as to enable the latter, in particular, to make chipsets compatible with Intel's forthcoming Pentium 4 CPUs. Such CPUs were launched on the market in December 2000. At the end of 2000 and the beginning of 2001 Intel entered into a number of licences with third parties for the manufacture and sale of chipsets compatible with its Pentium 4.
On 10th January 2001 Intel produced to Via the form of a further revised CLA ("the draft CLA") it was prepared to grant to Via. The draft CLA contains two provisions to which Via objects. By the first ("the Market Division term") Via is limited in the application of the licensed technology to chipsets compatible with Pentium 4 CPUs. In other words if Intel produce an improved version of the Pentium 4 CPU Via cannot use the licensed technology to make a chipset compatible with that...
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