Intel has won an English High Court ruling against Taiwan chip maker Via Technologies over its conditional licensing of Pentium 4 patents. The court said that a refusal to grant a licence of intellectual property rights was not a market abuse of itself, unless exceptional circumstances were present.

According to the court report by Lawtel, Intel and Via each had a worldwide, non-exclusive, royalty-free licence of each other's technology, but Via only had the right to use Intel's patents for certain products. Via was not licensed to use Intel’s Pentium 4 patents because it refused the terms offered by Intel. Intel sued Via for alleged infringement.

Via argued that it had not infringed Intel's patents in making P4 compatible products, even though not licensed to use them, on the grounds that, contrary to European competition laws:

  • Intel's infringement claim was an unlawful attempt to compel Via to enter into an unfavourable licence agreement for Pentium 4, containing cross-licences for Via's technology and other restrictions; and
  • Intel's refusal to grant a patent licence on reasonable lawful terms or at all was an abuse of its dominant position.

Via failed because its decision to refuse the licence terms that Intel offered would not force Via out of the market. The court found that Via “was not desperate for business.” It would merely mean that Via “was unable to manufacture chipsets for P4 chips and the economic effect on [Via] would not be fatal.”

On a question of cross-licensing, Via’s arguments were dismissed as being “so vague and imprecise as to amount to nothing more than pure unparticularised assertion.“

The court added that Intel owned its patents and was entitled to license them however it wished and it took a commercial decision to do so in respect only of chipsets for its current chips.

The court said that a refusal to grant a licence of intellectual property rights was not an abuse in itself, unless exceptional circumstances were present. Exceptional circumstances would include "complete elimination of all competition within the relevant market" but Via could not argue that that would apply in this case. Intel was not the only player in the market and there were other competitors of Via within the market.

The court concluded that:

“To grant [Via] the relief sought would effectively be to create a new form of compulsory licensing and there was no authority to justify this.”

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