'A pivot from war to peace:' The AMD + Intel armistice, in their own words

The cases against Intel going forward, or backward

The most recently developed picture in consumers' and investors' minds about Intel's conduct during the early part of this decade came from the State of New York's antitrust suit, filed against Intel last week. There, State Attorney General Andrew Cuomo cited multiple e-mails, some from then-COO Otellini, which appeared to indicate that Intel was not only eager to enter into exclusivity deals with Dell and Hewlett-Packard secretly and separately from AMD, but was aware of the leverage those deals had in influencing those manufacturers' purchasing decisions and behavior.

It's clear this morning that Otellini remains personally disturbed by the New York A G's allegations, which are by no means settled: "We strongly disagree with the New York Attorney General's case, and believe the complaint is entirely without merit. Discounting and rebates are standard business practices, and perfectly legal, and it's unfortunate that the New York Attorney General chose to distort the facts. We would have preferred to have engaged in a dialogue with the Attorney General."

When pressed for further "color" on the subject by another reporter, Otellini turned up the volume: "On some of the statements in there that were attributed to me, yeah, I wrote some of those, at least the ones I remember. On the other hand, many of those documents are taken broadly out of context. When the full nature of the e-mails is exposed, I think that you'll see there's another way to interpret some of these statements."

The cross-licensing agreement

If AMD's complaints against Intel have been clear, emotional, and the stuff about which producers make movies, Intel's complaints about AMD are made up of the type of legal licensing language that keep attorneys in business. Under the terms of the two companies' long-standing licensing agreement -- the complete, non-redacted text of which has never been made public to this day -- neither company was allowed to license the other's intellectual property to other manufacturers. With AMD spinning off GlobalFoundries as part of its restructuring, that became another company that could do business with innovators other than AMD, putting Intel's IP in jeopardy. As a safeguard, the existing agreement stipulated that any foundry that AMD should hire to produce its chips should be a majority-owned subsidiary of AMD at the very least.

When the cross-licensing agreement was announced this morning as part of the two companies' settlement, evidently some red flags went up as though they were entering into some mysterious, Microsoft + Novell-like covenant. (If disputes can't be made more mysterious than they truly are, perhaps we can make hyperbole out of agreements).

But as AMD's Tom McCoy explained, the new cross-licensing agreement was essentially an extension of the existing one that's been under our noses since 1976: "It is an important feature of our agreement with Intel that we have resolved all disputes that have divided the parties. On the intellectual property side, AMD and Intel have had patent peace with each other since 1976 -- meaning that each company has had design freedom to innovate, respecting each other as great contributors to the intellectual property portfolio in the industry. And that continues unabated. So we have the continued design freedom, as do they, and we have now the flexibility...for full use of foundries. So now we can have 100% of our output produced in foundries that do not have to qualify as subsidiaries of AMD."