Intergraph Files Motion to Compel Intel to Comply with Preliminary Injunction

(August 26, 1999) Intergraph filed a motion with the U.S. District Court seeking an order compelling Intel to cease its alleged non-compliance with the Court's preliminary injunction order. Workstation maker Intergraph sued its chip supplier Intel in late 1997 on various antitrust, patent, and fair competition theories. It now seeks the appointment of a special master to oversee Intel's compliance with order, as well as sanctions. Trial is set for mid 2000.

On Wednesday, August 25, the Plaintiff, Intergraph Corporation, filed its motion to compel the Defendant, Intel Corporation, to comply with the Memorandum of Opinion and Preliminary Injunction, which was issued by U.S. District Court Judge Edwin Nelson on April 10, 1998.

Intergraph v. Intel is a landmark case which involves both  intellectual property law and antitrust law and fair competition laws. Intergraph, which makes workstations based on Intel microprocessors, sued its chip supplier, Intel, on a wide range of legal theories, including antitrust, anticompetitive behavior, and patent infringement, for withholding information and products. Intel asserts that it is properly asserting its rights under intellectual property law.

Intergraph filed its original complaint in November of 1997. Judge Nelson granted Intergraph a preliminary injunction on April 10, 1998, which requires Intel to continue to supply it with advanced product information, advanced microprocessor "chip samples," "early production chips," and "production chips." Intergraph's most recent motion alleges violation of this order.

Intel appealed the preliminary injunction order. The appeal briefs have been filed, and the Court of Appeals heard oral argument on December 9, 1998. However, the Court of Appeals has not yet ruled.

Trial of the case is scheduled to begin on June 12, 2000. Pretrial discovery closes on October 11, 1999.

The Federal Trade Commission also brought, and settled, a related administrative action against Intel for its dealings with Intergraph, and other companies.

Intergraph CEO Jim Meadlock described the motion to compel in a press release. "This injunction is the law of this case and continues to be fully binding on Intel. I’m amazed at the degree to which Intel ignores the Court. They continue to stonewall on information and samples we must have if we are to compete as a manufacturer of Intel-based systems. We’ve given them the benefit of the doubt time and time again, but the cumulative effect of this pattern of abuse is that Intergraph’s hardware-related business is now in serious jeopardy. We have no alternative but to ask the Court to enforce its Preliminary Injunction Order."

The motion alleges that Intel repeatedly withholds or delays delivery of critical information, support and products to Intergraph, which it provides to Intergraph’s similarly situated competitors, such as Compaq, Dell, IBM, NetPower, and Silicon Graphics.

Intergraph's motion lists in detail the alleged violations of the preliminary injunction order. It alleges a failure to support Intergraph’s development efforts using Carmel chipset, failure to provide curative information for the Marlinspike defect, failure to supply enabling components for Pentium III, withholding of necessary enabling software, refusal to facilitate an Intergraph proposal to a potential customer, withholding of processor samples, and other things.

The motion also alleges that "Because of recurring support problems with Intel, Intergraph has been forced to eliminate whole product lines and the Intergraph organizations responsible for their production. Intergraph is presently in the process of terminating its PC and general purpose server operations, resulting in the termination of over 200 employees ..."

The motion concludes that Intel is "using feigned or partial compliance with the Order in order to further cripple Intergraph’s viability as an ongoing concern."

Intergraph not only seeks an order compelling Intel to comply with the preliminary injunction order. It also seeks appointment of a special master, a contempt order, and sanctions. "Intergraph asks that this Court appoint a special master who will monitor Intel’s actions and ensure that Intel complies with the Preliminary Injunction Order."

Intergraph (ticker INGR) provides comprehensive engineering, GIS, and IT solutions for the building, utilities and transportation industries, and local and national governments. Intergraph makes computers and workstations primarily for computer aided design, which are based on MS Windows NT operating system software and Intel microprocessors. Intergraph also develops CAD software.