AMD has said that rival Intel is threatening to end a patent cross-licensing deal between the two companies over AMD's recent spin-off of its chip manufacturing operations into a separate company.
AMD said in a Form 8-K filing to the Securities and Exchange Commission that Intel claims the chip plant spin-off constituted a "material breach" of the cross-licensing agreement, which dates back to 2001.
Intel threatened to terminate AMD's rights under the deal if the alleged breach isn't resolved within 60 days, according to AMD, which disputed the claims and shot back that Intel's threat itself amounts to a breach of the deal.
In a statement confirming its claims, Intel contended that the manufacturing joint venture set up by AMD and an investment firm owned by the government of Abu Dhabi doesn't qualify as a subsidiary of AMD under the terms of the cross-licensing agreement. The way the spin-off deal was structured also breaches a "confidential portion" of the licensing agreement, Intel said, adding that it has asked AMD to make the relevant section of the licensing agreement public but that AMD has refused to do so thus far.
Under the terms of the licensing agreement, the two companies will attempt to resolve the dispute through mediation, said Intel, which first disclosed last fall that its lawyers were analyzing AMD's spin-off plans. The dispute escalated in January, when Intel asked AMD for a meeting to discuss the issue.
"AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent," Bruce Sewell, Intel's senior vice president and general counsel, said as part of today's statement. "We have attempted to address our concerns with AMD without success since October. We are willing to find a resolution, but at the same time, we have an obligation to our stockholders to protect the billions of dollars we've invested in intellectual property."
Intel said AMD's claim that it had breached the licensing agreement by alleging a breach and threatening to terminate AMD's rights under the deal "is inconsistent with the dispute-resolution process outlined in the original agreement."
However, AMD asserted in a statement separate from the 8-K filing that Intel's actions are "an attempt to distract the world from the global antitrust scrutiny it faces." If the dispute ends up in court, AMD added, "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 [agreement]."
AMD completed the manufacturing spin-off earlier this month, leaving it with a 34.2 percent ownership stake in the joint venture, which was given the name GlobalFoundries. The rest of the new company is owned by Abu Dhabi-based Advanced Technology Investment.
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