Digital vs. Intel: could antitrust suit be next?

Digital Equipment Corp. has dropped hints that it could pursue an antitrust lawsuit against Intel, as it wages its patent infringement battle against the king of the PC microprocessor market. A letter to Intel's lawyers refers to the chip giant as a 'monopolist' and suggests that the company is trying to deny it access to 'essential' technology.

Digital Equipment has dropped hints that it could pursue an antitrust lawsuit against Intel, as it wages its patent infringement battle against the king of the PC microprocessor market.

Intel sued Digital last week to get it to return confidential product information, material that Intel commonly shares with manufacturers who design systems based on its chips. Digital's response to Intel's lawsuit, contained in a letter to Intel's general counsel, refers to Intel as a "monopolist" and suggests that the company is trying to deny it access to "essential" technology.

Digital's lawsuit against Intel - which alleges that Intel infringed on Digital's patented Alpha microprocessor technology to boost its Pentium, Pentium Pro, and Pentium II processors - is not a "legitimate business justification" for Intel demanding return of the product information, the letter states.

"If Intel continues in its pursuit of unlawfully denying Digital access to materials needed by Digital because of Intel's market power, Digital will respond as it believes appropriate," said Thomas Siekman, Digital's general counsel, in a letter dated May 28.

An Intel spokesman had no comment on Siekman's letter, except to say that Intel's non-disclosure agreements with Digital give it the right to terminate the agreements and request the product information back at any time. Intel is not a monopoly, he said.

"We're in a competitive marketplace," said Tom Waldrop, an Intel spokesman. "We compete fairly, in an evenhanded way."

A Digital spokesman had no further comment on the letter, released today. But according to one legal expert briefed on the document, Digital's letter makes an "implicit threat" of a possible antitrust claim against Intel.

The letter implies that Intel's confidential chip technology is an "essential facility," said Charles Rule, a partner with Covington & Burling in Washington D.C. and former head of the Justice Department's antitrust division. An "essential facility" must be critical to conducting business, Rule said. A classic example is access to the only railroad bridge that crosses a river, clearly essential to running a rail line that aims to cross that river, he said.

It would not be easy to persuade a court to treat Intel's intellectual property as an essential facility, Rule said. And despite Intel's dominance, several competitors offer alternative chips for running PCs, including Advanced Micro Devices and Cyrix.

"Frankly, it's not easy to prove that someone is a monopolist," Rule said.

A company with an antitrust complaint will often seek to get the US Justice Department or Federal Trade Commission to investigate the case, Rule said. While government-led antitrust actions tend to have higher credibility, the government can take a long time to proceed with the case, he said.

A spokeswoman from the Justice Department declined to comment on Digital's letter.

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