Intel responds to US FTC complaint

Intel says the US Federal Trade Commission's administrative complaint before an FTC administrative law judge is based upon a mistaken interpretation of the law and the facts. The chip-maker says it has long shared its intellectual property and early samples of its products with 'a number of key customers,' according to F. Thomas Dunlap, Intel vice president and general counsel. 'These customers work with Intel to develop products for the market on a mutually beneficial basis.'

Intel says the US Federal Trade Commission's administrative complaint before an FTC administrative law judge is based upon a mistaken interpretation of the law and the facts.

"For years, Intel has shared its intellectual property and early samples of its products with a number of key customers," says F. Thomas Dunlap, Intel vice president and general counsel. "These customers work with Intel to develop products for the market on a mutually beneficial basis."

"We believe the ultimate beneficiaries of this approach have been consumers because they get the latest technology and best products as soon as possible," Dunlap says. "At the same time, for more than 10 years, Intel has taken unprecedented steps to ensure that all of our activities and policies are in full compliance with existing law.

"The Commission's decision signals that they want to change the very laws upon which we've based our policies."

The FTC's action stems from the intellectual property lawsuits filed against Intel by Digital Equipment in May 1997, Intergraph in November 1997, and Compaq Computer in 1995. Those disputes prompted Intel to stop disclosing its intellectual property, in the form of confidential product information, to those companies.

"By its administrative complaint, the Commission apparently questions whether Intel has the legal right to assert its intellectual property rights as a defense to an attack on its core microprocessor business," the company said in a statement.

Intel contends the FTC's decision to file an administrative complaint is also an attempt to assert a new legal theory under antitrust law. Although the key legal requirement of an antitrust claim is harm to competition, the FTC is unable to show harm to competition in any market, Intel contends.

Under the FTC's theory, a company such as Intel that has a large market share cannot use its intellectual property rights even against a company that threatens its core business, and even when there is no harm to competition, the Intel statement contends.

"Intel intends to work through the administrative complaint process and if necessary appeal to a federal court. We believe that ultimately that process will conclude that our actions are lawful," Dunlap says.

Intel in Santa Clara, California, can be reached at http://www.intel.com/.

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