Nvidia Countersues Intel on License Agreement

A nice break from the he said, she said of Intel’s recent lawsuit with AMD is... Intel's he said, she said lawsuit with Nvidia. The latter has filed a counter-suit against Intel claiming a breach of contract.

In February Intel filed a lawsuit against Nvidia, which stated that the chipset license agreement the two companies signed four years ago does not extend to Intel’s future generation CPUs with integrated memory controllers.

"The disagreement is over the fact that they (Intel) don't believe we have the right to design chipsets for CPUs with integrated memory controllers, which we do," said Nvidia CEO Jen-Hsun Huang at the time. "Nvidia entered into an agreement in 2004 in order to bring platform innovations to Intel CPU based systems, and in return, Intel took a license to our rich portfolio of 3D, GPU, and other computing patents."

Reuters today reported that Nvidia is claiming that Intel has “manufactured” the licensing dispute as part of a “calculated strategy to eliminate Nvidia as a competitive threat.” According to Reuters, Nvidia believes Intel made misleading statements designed to undermine Nvidia's licensing rights and the counter-suit “seeks to terminate Intel's license to Nvidia's patents related to graphics processing and three-dimensional computing.” Reuters goes on to cite Nvidia spokesman Hector Marinez as saying Nvidia believes that without a licensing agreement, Intel's line of integrated graphics chips violate Nvidia's patent portfolio.

Previous reports say that the two have been fighting over this for a while. Huang said last month that Nvidia has been attempting to resolve the disagreement with Intel in a fair and reasonable manner for over a year. Huang also claimed that Nvidia’s Ion platform was what triggered the hostile action.

Nvidia CEO Responds to Intel Lawsuit

Last Monday, Intel filed a lawsuit against Nvidia, which apparently stated that the chipset license agreement the two companies signed four years ago does not extend to Intel’s future generation CPUs with integrated memory controllers. While Nvidia responded with a statement and official press release last week week, CEO Jen-Hsun Huang spoke to Digitimes about the suit and explained why he thinks the suit is groundless.

The original agreement (made in 2004) allowed Nvidia to produce chipsets for Intel CPUs without integrated memory controllers. At the time however, Intel did not have any integrated memory controllers in its plans and so no stipulation was in place to forbid Nvidia from making chipsets for CPUs with memory controllers. Nvidia responded to the court filing with a release stating that “we are confident that our license, as negotiated, applies," and that "Nvidia has been attempting to resolve the disagreement with Intel in a fair and reasonable manner for over a year."

"The disagreement is over the fact that they (Intel) don't believe we have the right to design chipsets for CPUs with integrated memory controllers, which we do," said Huang. "Nvidia entered into an agreement in 2004 in order to bring platform innovations to Intel CPU based systems, and in return, Intel took a license to our rich portfolio of 3D, GPU, and other computing patents."

Huang told Digitimes that the agreement was Huang revealed that the agreement made with Intel is "broad" nd does not go as far as to name specific technologies. He also said that the trigger Intel's "hostile action" seems to be the announcement of Nvidia's Ion platform.

Huang assured Digitimes that he is confident that the courts would find that the agreement does give Nvidia rights to produce chipsets that support Intel CPUs with integrated memory controllers and added that the company is not afraid of Intel and will not be backing down.

This case is about the future and Nvidia's ability to continue to innovate and make a difference in the industry by creating its own products, not just those that Intel allows it to create, Digitimes quotes Huang as saying.

Intel Sues Nvidia; Nvidia Says Intel is Afraid

On Monday, Intel filed a lawsuit against Nvidia, which apparently stated that the chipset license agreement the two companies signed four years ago does not extend to Intel’s future generation CPUs with integrated memory controllers.

The original deal allowed Nvidia to produce chipsets for Intel CPUs without integrated memory controllers. At the time however, Intel did not have any integrated memory controllers in its plans and so no stipulation was in place to forbid Nvidia from making chipsets for CPUs with memory controllers.

Today, Nvidia responded to the court filing with a press release stating that “we are confident that our license, as negotiated, applies," and that "Nvidia has been attempting to resolve the disagreement with Intel in a fair and reasonable manner for over a year."

Although currently shipping Nvidia chipsets are not affected by this dispute, future chipsets from Nvidia designed for Intel's Core i7 or future Atom processors are at risk. Nvidia's upcoming Ion platform for use with future Intel Atom processors is one such a product that may be affected by the court filing, as future Intel Atom processor are expected to feature an integrated memory controller. Judging from Nvidia's response, it seems Nvidia believes Intel is trying to inhibit Nvidia from releasing innovative products such as the Ion platform.

"When combined with a CPU, Ion enables a two-chip PC architecture for Intel processors two years ahead of Intel’s own solution. In addition, the Ion platform offers 10x the performance of Intel’s current three chip design." Nvidia continues to state, "given the broad and growing adoption of Nvidia’s platform innovations, it is not surprising that Intel is now initiating a dispute over a contract signed four years ago. Innovations like Ion, SLI, Hybrid power, and CUDA threaten Intel’s ability to control the PC platform."

The Nvidia Ion platform was recently put to the test and the results showed that the Ion platform was indeed a winner, offering excellent power savings and excellent graphical performance. Although the Intel Atom processor had been designed for use in inexpensive netbooks and nettops, Nvidia was able to show with its Ion platform that GPU performance does not need to be sacrificed to achieve a low cost Intel Atom-based system. With future Intel Atom processors expected to also feature integrated graphics solutions though, there may even more pressure on the long-term viability of the Ion platform.

Although the Nvidia Ion platform will likely appear first in inexpensive desktop systems, if rumors hold true it may be Lenovo that is first to release notebooks featuring the Nvidia Ion platform. According to a Commerical Times report, an 11-inch, a 12-inch and possibly a 13-inch Ion-based notebook will be released by Lenovo in the second quarter of 2009.