Intel had argued that it held rights to Intergraph's Clipper patents through a longstanding cross-license agreement it held with National Semiconductor Corp. Intergraph sued Intel in November 1997 for patent infringement, illegal coercive behavior, and antitrust violations.

U.S. District Judge Edwin Nelson ruled that "The undisputed facts establish that [National] had no legal authority to grant a license, as the patents at issue belonged not to [National] but to a legally distinct corporation — Fairchild. Intel thus never received a license from any entity with the power to grant one." Nelson added that "The fundamental flaw in Intel's license defense is that the alleged license would have originated from [National], while the Clipper patents quite clearly belonged not to NSC but to Fairchild, a separate corporation."

Intel said Monday (June 6) that it would appeal the ruling. "We are disappointed, and respectfully disagree with the judge," an Intel spokesman said. "We believe that the ruling has very broad and unprecedented implications" for a range of industry cross-licensing agreements.

The spokesman stressed that the cross-license defense was one of several arguments Intel is pursuing in its patent case with Intergraph.

Intel's appeal is not expected to delay a trial in the case, now scheduled to begin on Feb. 14, 2000.

Intel had reached a cross-licensing agreement with Fairchild Semiconductor prior to that company's acquisition by National Semiconductor. Then in September 1987, Intergraph completed a deal with National Semiconductor to purchase the Advanced Processor Division of Fairchild Semiconductor.

Several weeks later, Fairchild assigned its interest in the pending Clipper patent applications directly to Intergraph while simultaneously transferring all of its stock to National. The U.S. patent office issued Clipper patents to Intergraph between 1989 and 1992.