AMD Pursues Remainder of Intel Suit

Despite having watched one of its key claims against Intel get thrown out the courthouse window last month, and having briefly wrestled with the prospects of the remainder of its case being discontinued, AMD this week is proceeding with the remainder of its antitrust case against Intel.

Yesterday, AMD filed a motion with the Special Master appointed last month to oversee the discovery process -- where relevant evidence is revealed -- to compel Intel to turn over information regarding its own foreign conduct, which AMD claims is damaging its business in the US.

In a statement to the press this morning, AMD is arguing that Intel is refusing to hand over certain documents, citing Federal District Judge Joseph A. Farnan's ruling on September 26th, which found that US antitrust law doesn't provide protection against a company's alleged foreign misconduct if it damaged another US company within a foreign country. AMD is now claiming the documents it seeks will prove that Intel's alleged misconduct, which it says took place in Germany, directly impacted sales of CPUs in the United States, and may have been intended to do so.

"This motion presents the single, overriding issue of whether Judge Farnan's...decision is the discovery show-stopper Intel suggests. It is not," states AMD's motion to compel. "Granted, the decision precludes AMD from pursuing damage claims based on 'lost sales of AMD's German-made microprocessors to foreign customers.' But it recognizes AMD's right to pursue claims for lost sales to domestic customers of microprocessors regardless of the product's origin (domestic commerce claims) and for lost sales of American-made microprocessors to foreign customers (export commerce claims). And, on its face, it leaves open, as it necessarily must, all discovery relevant to either remaining claim."

The AMD theory now goes like this: Intel, it alleges, entered into exclusionary deals with suppliers and retailers in Germany. The effect of those deals was to reduce AMD's sales of microprocessors produced at the company's Austin, Texas, fabrication facility, as well as units produced at a second facility in Dresden, Germany. As a result, AMD was forced to discontinue shipments from Austin, thus impacting its business here in the US.

Further, AMD has resumed its original stance that Intel's has acquired a worldwide monopoly in microprocessors, not just that the company is seeking one, or that it has attained one overseas and is attempting to extend it.

"Evidence of foreign misconduct is also necessary to prove predicate elements of AMD's domestic commerce claim," states yesterday's motion, "namely, that Intel acquired or maintained its worldwide monopoly in an unlawful manner; and that the amount of domestic business that Intel excluded from AMD's reach, when combined with the magnitude of its wrongful exclusion elsewhere in the worldwide microprocessor market, constitutes a level of overall market foreclosure sufficient to render the domestic exclusion actionable under the antitrust laws."

"Since document exchange has not yet begun, it's pretty clear that we can't have withheld anything," Intel spokesperson Chuck Mulloy told BetaNews this morning. He pointed us to Judge Farnan's ruling last month, referred to by the title "Subject Matter Jurisdiction" - an indication by its own right that the ruling set some strict boundaries.

"If you recall, Judge Farnan struck a good portion of AMD's complaint saying U.S. Courts don't have jurisdiction," Mulloy remarked. "After the ruling, AMD asserted it was their belief that his ruling only applied to potential damages AMD could gain from the case but not to discovery. Clearly we disagreed, and the Judge told the parties to take the argument to his Special Master."

The argument was exactly what AMD filed, said Mulloy, and Intel is now preparing for its response in a few weeks.

Last month, Mulloy conveyed to BetaNews his company's opinion that Intel's conduct overseas was completely lawful in the US, and that the discovery process would only confirm that assertion.

The current status of AMD v. Intel does call into question whether US antitrust law - at whose core lies the Sherman Antitrust Act, signed into law in 1890 - effectively addresses the circumstances of the modern global economy. Many scholars argue that any true monopoly in any industry must extend beyond any one country's borders almost by design, and that all trade in a major industry such as semiconductors is, by definition, global.

AMD would hope that such opinions are given weight, especially as this case comes under review. Although with proceedings set to begin in April 2009, we may all be casting away our old, tattered quad-core processors by that time.

If AMD's legal case is centered around the effects of corporate conduct in a global economy, its financial case may be spinning on a different axis of late, and could conceivably be its undoing. Two weeks ago, the company's own CFO, Robert Rivet, touted recent AMD successes that would also seem to contra-indicate Intel's global monopoly:

"Third quarter sales increased 9% from the prior quarter, and 32% year-over-year, due to strong demand for all AMD processor brands," reads a statement from Rivet at that time. "Microprocessor unit shipments grew 18% sequentially as customers continued leveraging AMD's open platform approach." He added that very strong demand for the company's Turion 64 processors helped set a company sales record in that division.

Turion 64 90 nm chips are produced at AMD's Fab 30 facility in Dresden, Germany.