Intel Loses a Round in 386 Chip Battle : Technology: But the fight is far from over.


Intel Corp. lost a round Friday in its dispute with archrival Advanced Micro Devices Corp. over rights to build a sophisticated microprocessor.

The two big Silicon Valley chip makers have battled in several courts over licensing of the technology for Intel's 80386 microprocessor, the brain inside many advanced personal computers.

The popular chip is often nicknamed the 386, a designation widely used in the industry for years but itself the center of a bitter trademark dispute.

On Friday, U.S. District Judge William A. Ingram in San Jose denied Intel's request for a preliminary injunction to prevent AMD from using the 386 designation for a clone it plans to market.

The case is a narrow offshoot of a years-long battle that grew out of a 1982 pact between the two companies, making AMD a second source for Intel chips. The agreement broke down in 1984 and the war began.

Intel, based in Santa Clara, is still the sole supplier of the 386 chip, which is expected to generate almost $1 billion in sales, with profit margins of 80% to 90%.

Sunnyvale-based AMD is one of several companies that have been eager to build 386 clones and to vie for part of the huge market.

Personal computer vendors have rooted for the rivals because Intel cannot produce enough chips to satisfy demand.

Until last month, AMD's plans to market a clone were kept under fairly tight wraps. But a bizarre series of events led to the latest legal skirmish.

Intel filed the suit in early October after AMD documents sent by express delivery to the Sunnyvale Hilton, and intended for an AMD employee named Mike Webb, were misrouted to an Intel employee named Mike Webb. He had earlier stayed at the hotel.

Intel's Webb passed the documents to his boss, who turned them over to the Intel legal department. On the cover sheet, lawyers discovered references to a product called Am386. They resealed the package and sued AMD, citing the cover sheet as proof that AMD planned to use the 386 designation, which Intel claims as a trademark.

The judge initially granted Intel a temporary restraining order, which Friday's action dissolved.

"We lost a round, we didn't lose the war," Jim Jarrett, an Intel spokesman, said of Friday's ruling. "This will ultimately go to trial."

John Greenagel, an AMD spokesman, said the judge does not plan to issue his factual and legal findings until Thursday at the earliest.

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