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HP Pays Intergraph $141m to Settle Patent Dispute 224

Posted by samzenpus from the money-fixes-everything dept.
foxed writes "HP has settled a patent dispute with Intergraph. Intergraph claim the caching in Intel's Pentium processors violates their patent. Intel, AMD, Dell and Gateway made similar settlements last year."
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HP Pays Intergraph $141m to Settle Patent Dispute More

HP Pays Intergraph $141m to Settle Patent Dispute

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  • Which Patent? (Score:2, Insightful)

    by moshez ( 67187 )
    Does anyone know which patent it actually was, just so we can look at it and see how idiotic it is?

  • Small OEMs (Score:5, Interesting)

    by iamthemoog ( 410374 ) on Thursday January 27, 2005 @09:03AM (#11491094) Homepage
    I'm a small OEM and have shipped a few intel processor based machines... Am I liable to pay a fine too?

    Not had the bill yet, if so....

    • You can send the check directly to me, since I am representing the plaintiff in this case.

      We'll give a 10% discount for cash.

      I'll stop by around 10 o'clock to pick up the cash.

    • Short answer: YES (Score:5, Insightful)

      by FreeUser ( 11483 ) on Thursday January 27, 2005 @09:20AM (#11491186)
      The short answer is yes (IANAL but I read groklaw :-))

      My understanding, from everything I've read, is that patent holders can sue ANYONE making unauthorized use of their patent, from the manufacturer down to the end user. Mostly they go after manufacturers and resellers (note that some of those who settled with the holder of this particularly noxious patent were Intel RESELLERS, not chip manufacturers).

      This is one of the things that makes software patents even worse than most other patents (which are themselve a bad idea ... inventors don't need monopolies to exploit their ideas, monopolies are terrible for markets, and monopolies on ideas and invention any progress built upon those ideas or inventions) ... software users exist in almost every home, hence, like the new copyright extentions of the late 20th and early 21st century, patent lawsuits can be extended all the way down to a 12-year old using a program on her PC or Mac that violates some speculator's patent on [insert obvious idea here].

      Pro-patent lobbiest and apologists will argue that you can always go to court to overturn the patent with prior art if it is truly illegitamate (thereby neatly avoiding the entire point of how terrible patents are for anyone who cares about technological and human progress), and that's true as far as it goes ... until you look closer and realize that, on average, it costs $1 million dollars to overturn a single patent, an amount of money few mere mortals have, and most small businesses can ill afford. This cost makes even invalid patents effectively valid, as so few people and companies can afford the expense of correcting the patent offices negligence, and will be forced to pay the shakedown money (or cease using/making the software/device that allegedly infringes, or both) instead.
      • They're hardware patents.

      • = $4 million USD in litigation to kill a patent (Score:4, Insightful)

        by SgtChaireBourne ( 457691 ) on Thursday January 27, 2005 @11:17AM (#11492170) Homepage
        Pro-patent lobbiest and apologists will argue that you can always go to court to overturn the patent with prior art if it is truly illegitamate (thereby neatly avoiding the entire point of how terrible patents are for anyone who cares about technological and human progress), and that's true as far as it goes ... until you look closer and realize that, on average, it costs $1 million dollars to overturn a single patent, an amount of money few mere mortals have, and most small businesses can ill afford.
        The figures mentioned at the FFII Software Patent Conference, Brussels 9-10 Nov 2004 were more in the ballpark of 4 million USD [ffii.org] to shoot down an illegitimate patent. I'm not sure what the real figures are, but 1 million USD sounds cheap. However, whatever the cost, it will be neither cheap nor affordable for small or medium sized businesses. Unfortunately, in Europe, the large majority of revenue is generated from small and medium businesses.

        One thing that most articles miss is that software patents really screw anyone who even uses a computer, not just developers.

        • Unfortunately, in Europe, the large majority of revenue is generated from small and medium businesses.

          That's true in the US as well. Unfortunately, large corporations have political and financial cloute vastly out of proportion with their impact on the economy ... because the wealth is concentrated, and can be used in a coordinated lobby/bribery effort that no individual small or medium sized corporation can afford.

          The amount of wealth that would be created if the patent system were completely scrapped
      • One of the greatest harms 9/11 did was to add "friction" to the economy. Companies now have to pay more to hire people (background checking), take less risks, buy more insurance etc. Of course companies in other parts of the world are already doing all that so this kind of leveled the playing field a bit.

        Patents add another layer of friction to the US economy. What this means is that in countries where patent lawsuits are discouraged and where patent litigation is less profitable will enjoy a competitive a
      • Theoretically the resellers can in turn sue Intel for the damages they had to pay (and then some).

        Don't know if it'll happen in this case, probably be settled quietly with Intel offering some discounts on future sales.
      • My understanding, from everything I've read, is that patent holders can sue ANYONE making unauthorized use of their patent, from the manufacturer down to the end user.

        Hm... that's quite a nasty situation. So, if we're updating our "... profit!" plan, it could look something like this:

        1. Alice gets patent for X
        2. Bob (secretly a friend of Alice's) sets up company, builds product Y using technology X to other companies and end-users.
        3. Alice sues Bob for using patent without a license. Bob's company goes
      • Ok, let's say I'm a real estate agent who spends all day driving potential customers around in my Mercedes. Then Ford wins a patent infringement suit against Mercedes for some gear cog or whatnot. Am I infringing on Ford's patent? Am I liable?

    • Re:Small OEMs (Score:2, Informative)

      by gowen ( 141411 )

      I'm a small OEM and have shipped a few intel processor based machines

      No. You should be protected by
      section 2-312 of the Uniform Commerical Code.

      Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like...

      Thanks to an anonymous coward [slashdot.org] who pointed this out to me.

  • What is the legal basis for this? (Score:3, Interesting)

    by nagora ( 177841 ) on Thursday January 27, 2005 @09:04AM (#11491098)
    Did HP have anything to do with the design of the cache in the Pentium? If not, why are they paying anything? Surely it's up to Intel to pay royalties on patents they breached, not their customers. I particularly can't see any way Gateway could have been liable for this.

    TWW

    • Re:What is the legal basis for this? (Score:5, Informative)

      by lars_stefan_axelsson ( 236283 ) on Thursday January 27, 2005 @09:09AM (#11491127) Homepage
      Did HP have anything to do with the design of the cache in the Pentium? If not, why are they paying anything? Surely it's up to Intel to pay royalties on patents they breached, not their customers. I particularly can't see any way Gateway could have been liable for this.

      That's not how patents work I'm afraid. In the words of the USPTO:

      The right conferred by the patent grant is, in the language of the statute and of the grant itself, "the right to exclude others from making, using, offering for sale, or selling" the invention in the United States or "importing" the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention. Once a patent is issued, the patentee must enforce the patent without aid of the USPTO.

      Note the word use in the text above.

      • Re:What is the legal basis for this? (Score:4, Insightful)

        by nagora ( 177841 ) on Thursday January 27, 2005 @09:16AM (#11491169)
        Note the word use in the text above.

        But surely if the customer bought the product for resale in good faith the law can't be applied any more than I can be done for handling stolen goods which have somehow been sold through an legitimate retail outlet.

        Intent to break the patent must be part of the legal requirement in any sane system...oh, I see

        TWW

        • How will you ever prove intent? The requirement that I have knowingly violated the patent will be impossible to prove. I mean, I'll just never bother checking the patent filings and then I'll never know anything. I can have four hundred stolen toasters in my posession that I bought off a homeless man; how can you prove that I *knew* they were stolen?

          If the users are smart, they would get indemnity from the suppliers that the products are not plagued with patent violations.
      • "the right to exclude others from making, using, offering for sale, or selling" the invention in the United States

        So if this is the case, why don't they sue PC World or the local PC dealer for distributing the machines with Intel processors?

        Or while we are at it, why not sue the post office for delivering these machines. Hell, why not sue the oil companies for delivering petrol to the post vans delivering the intel processors.
        • I very much doubt that you'd get very far at all trying to sue the petrol suppliers, but as I read the excerpt (IANAL, etc), yes you could sue PC World for selling them.

          That's not to say you'd necessarily *win* the case, but I suspect you could argue that there was indeed a case to answer.

        • So if this is the case, why don't they sue PC World or the local PC dealer for distributing the machines with Intel processors?

          That's simply because the money isn't in it. Look at the article, they expected to pay $11 million in legal fees. As you don't have a 'loser pays' system (I know there are exceptions) you'll have to sue someone that can pay you enough in damages to make it worth your while.

          So, the moral is; if you're doing open/free source development. Make sure you are poor, shouldn't be too h

      • So if you ever sold a computer on ebay with a pentium you could bet hit?
        This is just dumb. Sorry but yes I can Intel needing to pay and maybe AMD but no one else.
        I wonder if they went after IBM?
        • It sounds like it's preventing people from circumventing patent liability by importing stuff manufacturerd overseas (paid for overseas too if you're creative enough with your accounting). That is, if the "sell" clause wasn't there, Intel could move their fab plants to Taiwan, violate every U.S. patent, Dell/HP/etc could buy the CPUs using Euros, ship them to the U.S., and sell them without incurring any patent liability. If the "use" clause wasn't there, you'd have a situation where foreign mail order fir

        • no (Score:2)

          by geekoid ( 135745 )
          not in any practical manner.

          As is the case for all these stories, there is a lot you nede to pay attention to.

          1) HP was suing them for patent infringement as well.

          2) They did not win the case, it was settled. Probably would have lost . WHy did they settle you ask? that brings us to:

          3) The settle ment ended with HP getting access to several of their patents, and they got access to some of HPs patents.
          So what HP really did was buy a liscense to a patent portfolio. If the company didn't have anything they
    • the people replying to your questions are not experts, and are probably clueless about patrents except what they read on slashdot.

      Also, HP paid to use many of the patents from the patent portfolio, not caching

  • Intergraph's Patents (Score:5, Informative)

    by gowen ( 141411 ) <gwowen@gmail.com> on Thursday January 27, 2005 @09:07AM (#11491113) Homepage Journal
    Intergraph's patents are numbers 4,899,275 [uspto.gov], 4,933,835 [uspto.gov] and 5,091,846 [uspto.gov].

    Just don't ask me what any of that means...

    • Re:Intergraph's Patents (Score:5, Interesting)

      by gowen ( 141411 ) <gwowen@gmail.com> on Thursday January 27, 2005 @09:22AM (#11491196) Homepage Journal
      Having now read them, albeit briefly, I *think* that Intergraph's novel idea is a neat way of merging the onboard cache and the MMU.

      Hate to rush against the tide, but that's a really great idea, that no-one prior to Intergraph had managed to come up with. It's also an actual invention, rather than just an algorithm, or an algorithmic expression of well-known mathematics.

      I can't see any great problem with these patents, and welcome our new cache-management overlords.
      • Whatever. Even if some bright guys working there many years ago figured out something really cool it is not a reason to sue _everyone_ now. Ask yourself this question - who will get this (pretty big) money? Definitely not those bright guys (I guess). Big research company, screwed on the market, hire law-cketeers, help destroying the industry. I don't see how it helps your national economy or technology progress.
      • The problem I have is suing people that didn't *make* or *design* the part that infringes. Intel, AMD, IBM probably. HP, Gateway & Dell? I don't think so. Integrating a part into a larger system doesn't make that system an infringer, IMO
      • Seems to me that Intel is the bad guy in this case not USPTO... Intel swiped some tech from Intergraph and didn't pony up for it. Now we all suffer because we all "use" intel chips (and their cache) we don't just "have" them. If intel had just treated Intergraph fairly none of this would have happened!

        The "use" thing is also why this feels so much like a software patent. Doesn't it seem stupid that I have basically no idea how the Pentium cache works, yet I'm infringing a patent on how it works. Paten

  • Fire chimpzenpuss (Score:3, Interesting)

    by ceeam ( 39911 ) on Thursday January 27, 2005 @09:07AM (#11491116)
    Who the fuck cares? I'm sure there are better topics in submission queue. And BTW - it is daytime in Europe now. There's been no much stories since early morning here. Is /. only for Californians? Really - OSDN - implement a stories selection/voting public process like for comments and fire the "editors" like the one in subject. (Mod at will).
    • Who the fuck cares?

      People with jobs?

      I'm sure there are better topics in submission queue.

      Let's see, here is a story which has direct implications for the livelihoods of nerds everywhere. OTOH, there are such important stories as `intel launches what we knew they were going to launch and someone has some pictures of laptops which look just like every other laptop you ever saw'. Or there is the 2.5 year old science story which presumably exists because National Geographic has some space to fill, my go

  • The article says that Intergraph is suing HP et al. for selling products that contain a product that infringed upon the patent (Pentium Processors).

    How about in other fields, such as food.

    A farmer accidently grows patented/copywrited (GM?) corn in his field. Sells it to a cereal company that turns it into corn flakes. Can the corn seed patent owners sue the cereal company? How about the baker that is making stuff using the cereal company's product?

    • Re:Does this extend to other fields? (Score:5, Interesting)

      by JCMay ( 158033 ) <JeffMayNO@SPAMearthlink.net> on Thursday January 27, 2005 @09:22AM (#11491193) Homepage
      The answer is of course, yes, they can be sued. Patents, as others have said, protect not only the PRODUCTION of the patented idea, but the sale and use of it as well.

      There's been lots of concern over patented crop varieties for just such issues. Farmers normally save seeds from one year to plant the next. Farmers that use patented varieties have to abide by the licenses, which always stipulate that saving seeds is not allowed. The next door neighbor farm does not buy the patented seed, but due to the prevailing winds his fields cross-pollinate with the plants that are of the patented variety. He saves his seeds for next year and then becomes liable when his cross-pollinated crops contain the patented genes.

      I never said I agree, but that's the way it works in the United States.
      • The answer is of course, yes, they can be sued. Patents, as others have said, protect not only the PRODUCTION of the patented idea, but the sale and use of it as well.

        OK, this is the OBVIOUS question:

        If intel paid these people for the right to use their cache design (in the settlement), why does everyone else have to as well? Do I have to pay them since I use the cache design in my dell pc at work, even though Intel and Dell already paid twice for that processor to use that design?

  • Patents and monopolies are evil (Score:3, Interesting)

    by antivoid ( 751399 ) on Thursday January 27, 2005 @09:10AM (#11491131) Homepage
    Im not trolling... But seriously, patents need to be banned. It's crippling the IT world.

    In my country, there is a phone company called telkom. They make BILLIONS in profit every year. The reason for this is that our government has granted monopoly rights to the phone company. It sucks!

    The reason they grant them monopolism is because 80% of the government has shares in the damn company, causing the rest of the country to be screwed as a result.

    Patents are the same - the hurt local and global economies by enabling monopolism.

  • More than just a settlement (Score:3, Interesting)

    by QMO ( 836285 ) on Thursday January 27, 2005 @09:18AM (#11491174) Homepage Journal
    FTA: "Under the deal, HP has a license for all Intergraph patents for any use, while Intergraph has access to HP patents in specific fields in which it has products."

    It seems that HP paid for more than just a dropped lawsuit. They also paid for the use of a lot of patents.

  • From TFA (Score:3, Funny)

    by ceeam ( 39911 ) on Thursday January 27, 2005 @09:25AM (#11491213)
    "Intergraph said in a release that it expects to pay $11 million in legal expenses."..."The company created an intellectual property division in 2002 to protect its intellectual capital. Intergraph said that, since then, its IP protection and enforcement efforts have generated about $860 million in pre-tax income."

    I'm sure that "classic-style" racketeer division would've cost them quite a bit less.
    • If those numbers are true, it would make even Microsoft's margin on Office look small (90%).

      A mob protection racket will have far more expenses, mainly because of the organizational overhead and the cost of sending someone to every business in a pretty large city ($860M is a lot of money) every so often.

      So you can say that this is the next level in protection rackets. Lower costs and more money.
  • Intel should offer everyone patent protection I guess. Hell I guess everyone that sells any type of part should offer patent protection.
    • Unfortunately, if Intel has to pay up, prices will go up. In the end, we all have to pay up for all these litigations and excess use of resources on legal claims.

  • Intergraph IP if anyone is interested (Score:5, Interesting)

    by billwie ( 257149 ) on Thursday January 27, 2005 @09:46AM (#11491358) Journal
    Intergraph Patents all relate from their own custom unix architecture that they abandoned in the early 90s (suckered into windows/intel). Their first cases involved their claim that Intel was trying to strong arm them to get their IP... and I thought their claim was very valid. Unfortunately now they seem to have made a business unit that's sole purpose is to chase suspected patent violators. Some of their other products are quite useful (mapping and GIS) though, if overpriced and underhyped.

    check out http://www.intergraph.com/ip/cases.asp [intergraph.com]for more info on the cases

    and

    http://www.intergraph.com/ip/tech.asp [intergraph.com] for info on how a software company ended up with all these hardware patents in the first place.

  • HP sells PC's with Intel chips (Score:3, Interesting)

    by HangingChad ( 677530 ) on Thursday January 27, 2005 @09:47AM (#11491364) Homepage
    And HP has to pay a patent infringment settlement? That is seriously f'ed up.

    Our patent system is broken. Extortion by litigation has to stop. This is stifling innovation and crippling our economy. Absolutely, un-f'ing-believable.

  • I have little doubt that any of the companies that settled could have fought to have the patents in question invalidated through illustrations of prior art in some form or another. With enough lawyers and creative argument anything is possible.

    So why didn't they is a question that many have asked? I think it's simply that if companies start battling to strip each other of their IP, then IP becomes very devalued and the cost of defending it erodes the net value even further. It is probably much easier to
  • I still remember when Intergraph had the nicest technical workstations you could ask for without going RISC... too bad they really fooled themselves into thinking you can work with Wintel and yet survive on quality.
  • The Clipper technology was designed by Schlumberger and FairChild in the mid 1980s and sold to InterGraph. There was a "sweet spot" in the early 1980s when a small R&D group of less than ten people could design and manufacture an advanced chip. This was after Conway and Mead wrote a "circuit compiler" to computer design these chips (I was drawing/taping chips on drafting boards in the 1970s) and before the number of transistors got so large that you needed a larger team to manufacture it. The Clipper pr
  • It used to be people tried to win the lottery. Then they tried to buy the next big stock before it boomed. Now people try to patent everything in hopes that they can hit the jackpot.
  • So am I at risk here for buying Intel Pentium processors for my computers? Or from AMD?
  • these people owned a patent, and had an avenue to reclaim losses.

    This ois a solid patent, for advanced technology. This is not a business model patent i.e. 1 click shopping.

    If you built a widget, do you think it would be OK for a company to just use it and benefit from it without paying for it?
    I certianly don't.
    This is what would happen, people would make col thing, then corporation would make all the money.

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