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AMD Buys Into Patriot's Patent

AMD skirted a potentially nasty patent lawsuit with a stock purchase and licensing agreement from Patriot Scientific .

The No. 2 chipmaker confirmed today that it bought restricted shares of Patriot stock, obtained rights to make and sell Patriot's IGNITE 32-bit stack microprocessor and obtained rights to the controversial "ShBoom" microprocessor patent portfolio in its entirety.

Additional terms of the agreements are being kept under wraps, but AMD spokesman Robert Keosheyan told internetnews.com that ultimately, the deal allows AMD to protect itself from Intel.

"This patent portfolio has been the source of some significant litigation," Keosheyan said. "Licensing the technology protects us and ensures our customers won't get sued. Purchasing of the stock basically ensures our voting rights in proxy if it is ever challenged."

The controversy centers on U.S. Patent number 5,809,336, an on-chip clocking technology found in Intel Pentium processors. Patriot Scientific, a small, San Diego-based seller of embedded microprocessors for cars and scientific equipment claims it owns the patent and sued Intel and its Japanese partners Sony, Fujitu, Matsushita, Toshiba, and NEC last year. Patriot then turned around and put an additional 170 chipmakers and vendors on notice that they too may be liable for the patent.

Keosheyan said AMD was one of the companies put on notice but does not use the technology in any of its products and has no immediate plans to use it.

"The license allows us to change that if it becomes desirable," he said.

All litigation is on hold while Judge Jeremy Fogel with the U.S. District Court in San Jose, Calif. rules on the 100 percent ownership of the 336 patent and what can be submitted for discovery, Patriot Scientific spokesman Lowell Giffhorn told internetnews.com.

Bruce Sunstein, co-founder of Boston-based IP law firm Bromberg and Sunstein said the mere fact that AMD is willing to license and invest in Patriot could signify just enough that the patents are valid.

"My guess is that there could be some 'there' there," Sustein said. "AMD thought enough about the portfolio because they thought it would succeed. They would probably rather an expense of a license to show up on their balance sheet as an investment rather than a license payout."

Sustein also noted that AMD is no friend of Intel and by helping the Patriot people, they could make life more difficult for Intel.

Additional terms of the agreement between Patriot and AMD are expected to surface once the company files its related 8K with the SEC.



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