Intel in $500m lawsuit over chip patent

Intel has been hit with a $500m lawsuit from a company claiming a patent it holds has been violated in Pentium Pro and Pentium II processors.

TechSearch, an intellectual property consultancy based in Illinois, bought the patent from International Meta Systems (IMS). In 1996, IMS received a patent for a reduced instruction set computer (Risc) chip which can emulate an Intel x86 processor. TechSearch is now alleging the technology was incorporated in two of Intel's best-selling products.

According to lawyers for TechSearch - a company which buys and sells intellectual property rights - Intel should have given the company between 1 and 3 per cent of its net sales as royalty payments. TechSearch claims that if it wins the case in court, damages could exceed $500m.

However, an Intel spokesman said: "We believe they're wrong and we're going to fight them. We will defend the lawsuit vigorously."

Previous lawsuits with Digital Equipment Corporation and Alabama workstation vendor, Intergraph, have this year prompted the US Federal Trade Commission to launch an antitrust investigation into the world's largest chip-maker.