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VIA Signs National to Build Chipset : Move attempts to circumvent lawsuit by Intel San Jose-Mighty Intel Corp. may be thwarted by a mere logo. When VIA Technologies Inc. last week signed National Semiconductor Corp. to manufacture its chipsets, the Taiwanese company was attempting to make an end-run around Intel, which has sued VIA to stop it from making Intel-compatible chipsets. VIA contends that Santa Clara, Calif.-based National is permitted to build its chipsets, because when National acquired Fairchild Semiconductor in 1987, it gained a cross-licensing arrangement covering Intel patents for most x86 processors. "We do not believe National's license allows them to serve as a foundry," disputed Chuck Malloy, an Intel spokesman. But a loophole may exist that will give VIA and National what they want. According to National spokesman Bill Callahan, when National and Intel renegotiated their cross-licensing agreement a few years ago, there was indeed a clause that prohibited National from making chips on a foundry basis using Intel's patents. However, the agreement also stated that National did have the right to use the Intel technology if it was making the products for itself and would brand the product with the National logo. According to Callahan, the chipsets that will be made in National fabs will have both National's logo and Via's. So the question really is, can National make the parts using both logos and not violate the cross-licensing agreement? "If (Intel) wants to stop them from making (chipsets), they will have to come after us," said National spokesman Bill Callahan. "We believe we are covered by our cross-licensing agreement that allows us to manufacture these parts. Intel may see it a different way." "They certainly aren't rolling over and playing dead just because Intel filed a lawsuit," said Scott Hudson, senior analyst at Cahners In-Stat Group, Scottsdale, Ariz. The outcome of the dispute could also be critical to the fortunes of Advanced Micro Devices Inc., which needs a viable source of chipsets for its microprocessors. It also could determine whether PC-133 will succeed as an alternative to Direct Rambus DRAM, as Intel has yet to commit to building chipsets that work with PC-133. Marc Brown, computer law specialist and law partner at Oppenhemier, Wolff & Donnelly, said the courts often take a broad view of such arrangements. "Sometimes in a cross-licensing agreement if you go so far and then step over the line, the courts will let them go a little further than the original agreement," said Brown. "Even if National has stepped across that line, will the law enforce it? They may just give (National) a warning." Peter Glaskowsky, senior analyst at MicroDesign Resources, a microprocessor analyst firm, said Intel would be better off just leaving the whole situation alone if it boiled down to whose logo is on the chipsets. "It's better for Intel to not pursue this if there is anything talked about logos," said Glaskowsky. "There are more important things to worry about than just losing a few percent points of market share to VIA, who is relatively harmless to the giant company." Intel apparently feels differently. Intel's recent lawsuit against VIA alleged VIA violated its licensing pact with Intel for three months, Malloy said. Intel has not said whether it plans to include National in the lawsuit. However, if Intel can get an injunction against VIA, then the argument over chipsets and next generation main memory may be moot. The long legal battles and courtroom costs could tie VIA's hands for months or years. In a statement made jointly by VIA and National, the firms said, "This alliance is for VIA to continue to develop and market VIA's chipset which offers the advantages of a 133MHz front-side bus, PC-133 SDRAM, and AGP 4X compatibility." VIA said the PC-133 chipset would be used in Pentium II-type processor-based PCs, and National said it would take three to four months for the company to get the chipsets ready for production. The agreement does not include building Cyrix processors, that VIA bought last month, and National said there has been no decision made whether it will build them for VIA. Chad Fasca contributed to this article. |