Posted: 3:30 p.m. EST, 4/13/98

HUNTSVILLE, Ala. — Desktop-workstation vendor Intergraph Corp. has won a big victory in its acrimonious legal dispute with Intel Corp., with a federal judge issuing a preliminary injunction that prohibits Intel from "taking any action adversely affecting . . . Intergraph," according to a copy of the decision made public by Intergraph.

"The court supported the contentions we made," said Jim Meadlock, chief executive officer of Intergraph (Huntsville, Ala.) .

Intel said it was disappointed in the decision. "We think the judge has made an error, but we will comply with the ruling," an Intel spokesman said. "We're evaluating our options, including the possibility of filing an appeal."

The two companies began their courtroom jostling last fall , when Intergraph filed suit in U.S. District Court in Alabama charging Intel with infringing a cache-management patent and with alleged anti-competitive practices. Intel subsequently countersued.

For Intergraph, the biggest win may be language in the decision that guarantees it gets the Pentium IIs it needs to build its increasingly popular Windows NT workstations. In his 80-page decision, U.S. District Judge Edwin L. Nelson directed that "Intel shall supply Intergraph with an allocation, and set aside a supply of microprocessors, on an advance basis for product development, in such quantities as forecast by Intergraph in the same manner and the same t erms as is done by Intergraph's similarly situated competitors."

Intergraph needs those Pentium IIs, because it is in the midst of gearing up a multipronged strategy to push ahead in the Windows NT workstation market. The company this year spun off its Intergraph Computer Systems unit as a free-standing company, with plans to boost its share of the workstation market. In addition, a host of product introductions is planned. Intergraph is also eyeing plans to establish a beachhead for its workstations in the EDA market.

Intergraph said its product strategy has already been affected by the battle with Intel. "Our high-end products have been delayed tremendously because of this situation. It's had a significant impact on us in terms of what we can ship. It's had an even greater impact in terms of marketing cooperation," said Wade Patterson, president of Intergraph Computer Systems. "The issue here is not just production chips. The issue is advance technical information and advance samples so we c an have our products ready at the same time as our competitors."

This week's injunction won't end the court battle between the two companies. Regardless of whether Intel appeals the injunction, Intergraph's main lawsuit has yet to come to trial. Intel said it has not yet filed its response to that main suit. As a result, indications are that the legal fracas could drag out for some time.

"We're proceeding under the assumption that this [case] is going to court," Meadlock said.

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