Nvidia countersues Intel

SAN FRANCISCO—Graphics chip vendor Nvidia Corp. has filed a countersuit in Delaware against Intel Corp. claiming breach of contract, the company said Thursday (March 26).

The action, filed in Delaware's Court of Chancery, also seeks to terminate Intel's license to Nvidia's patent portfolio, Nvidia (Santa Clara, Calif.) said.

Intel (Santa Clara) last month filed suit against Nvidia in the same court, alleging that a four-year-old chipset license agreement between the two companies does not extend to Intel's future generation CPUs with integrated memory controllers, such as the Nehalem processor.

Some see the legal dispute between Intel and Nvidia as indicative of larger competitive battles shaping up between the two companies. A recent report by financial analysts at Barclays Capital predicts that Intel will make gains at the expense of Nvidia and command about 55 percent of the overall graphics market by 2010, while Nvidia's market share slides to 24 percent.

In a statement, Jen-Hsun Huang, president and CEO of Nvidia, said his company did not initiate this legal dispute but must defend itself and the rights it negotiated for when it provided Intel access to its patents. "Intel's actions are intended to block us from making use of the very license rights that they agreed to provide," Huang said.

According to Nvidia, the company entered into the disputed agreement in 2004 to bring platform innovations to Intel CPU- based systems. In return, Intel took a license to Nvidia's portfolio of 3D, GPU, and other computing patents, the company said.

Nvidia said it has been attempting to resolve this dispute for more than a year.

Nvidia has made available on its website both the initial Intel filing and Nvidia's response and counterclaim.