Advanced Micro Devices Can’t Use Intel Software, Judge Rules

In a major setback for Advanced Micro Devices, a federal judge ruled Wednesday that the company does not have the right to use special computer chip software developed by rival Intel Corp.

The ruling by U.S. District Judge William Ingram in San Jose means at least a six-month delay in AMD’s planned launch of a “clone” of Intel’s hot-selling 486 microprocessor, the brain inside many advanced personal computers. Such a delay can be quite costly in the fast-changing PC business, and AMD’s stock may drop sharply today as a result.

AMD, based in Sunnyvale, had planned to begin marketing a clone of the 486 chip next month. But now the company will have to complete development of its own special software, known as microcode, before it can move ahead.

F. Thomas Dunlap, Intel’s general counsel, said he was “very pleased” with Ingram’s decision. The ruling largely preserves Intel’s lucrative position as the sole source for the 486, which is rapidly displacing the 386 as the favored chip among PC manufacturers.

While the ruling has no immediate impact on AMD’s successful clone of Intel’s 386 processor, it leaves the company vulnerable to an adverse ruling in a separate legal dispute with Intel over that product.

Santa Clara-based Intel is seeking to overturn an arbitrator’s ruling that grants AMD the right to build the 386. If Intel succeeds on that front--which most legal experts consider unlikely--it could then sue AMD for using its microcode in the 386 and possibly force the Sunnyvale company to withdraw its 386 from the market.