Intergraph Loses Antitrust Suit Against Intel

On Friday, November 5, the US Court of Appeals decided in favor of Intel in the Intel-Intergraph antitrust case--an outcome that was largely overshadowed by Judge Penfield Jackson's findings against Microsoft that same day. Alabama-based Intergraph had filed an antitrust and patent infringement lawsuit against Intel, accusing Intel of an almost unending number of vicious skullduggeries. Over 1 1/2 years ago, an Alabama district court threw out the patent infringement lawsuit, ruling that Intel held the patents that the suit accused it of infringing, but the court found that Intergraph's antitrust accusations were valid. In the antitrust portion of the lawsuit, Intergraph accused Intel of excluding Intergraph from product development programs and refusing to give Intergraph access to vital product information. Most important, Intergraph claims that when it found bugs in Intel's LX and PIIX4 chips that rendered its computer boards inoperable, Intel refused to supply the technical information that would have enabled Intergraph to fix the boards. "Intel also," reads the lawsuit, "ceased to supply Intergraph with information on Intel's LX and BX chips and the Merced and Deschutes microprocessors, all of which was necessary for Intergraph's product development." Intel appealed the decision, and, after 11 months of consideration, the Court of Appeals knocked down the district court's decision, pronouncing that Intel is not a monopoly. The court presented its decision in two main arguments. First, the court argued that Intel was not in direct competition with Intergraph. Although Intel's decisions affected Intergraph, Intergraph is in a "downstream" marketplace, the court said. Second, the court ruled that although Intel's behavior was harshly competitive, its was not anticompetitive. The court argued that the antitrust laws permit harsh and even malicious behavior, so long as such behavior is not anticompetitive. Intel, the court said, was under no obligation to help Intergraph survive. The court also pointed out that Intergraph was asking Intel to provide it with privileged information. Intergraph had asked for access to patented and confidential information before the general marketplace had access, hoping to gain a competitive advantage. Patent laws, noted the court, don't force any company to license or divulge its patents to all who ask for it. To understand the court's decision, you can compare the case with the Caldera antitrust lawsuit against Microsoft, which has recently been allowed to go to trial. In that lawsuit, Caldera is accusing Microsoft of excluding it from Microsoft's public beta program, blacklisting Caldera from a program that Microsoft has made widely available to others. In the Intel-Intergraph case, Intel was simply refusing to grant Intergraph privileged status. The court practically accused Intergraph of using antitrust laws to shield itself from competition: "The purpose of the antitrust laws is to foster competition in the public interest, not to protect others from competition, in their private interest." The court's decision doesn't bode well for Intergraph's struggling PC business?a business that the company is now shopping around and that is having troubled times. Intergraph was counting on a legal victory to bolster its PC business's chances of survival.

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