A small Canadian computer design company sued Intel on Thursday, claiming that the chip manufacturer had infringed on a patent relating to high-speed microprocessors. All Computers Inc. wants an injunction and a cool $500 million in damages.

Toronto-based All Computers designs and sells computer parts and circuitry although, according to reports, it has not produced a product in the last ten years. Its main assets seem to be two US patents that deal with high-speed microprocessors.

One of these appears to cover the basic circuitry necessary for the operation of high-speed processors, such as the Pentium processors, in the modern circuit board environment. In general terms, the patent relates to methods of synchronising the differing speeds of microprocessors and chip sets, so that they can work together.

According to the suit filed in Alexandria Federal Court on Thursday, Intel has manufactured, used, sold and offered for sale certain computer products, including its line of Pentium processors, that infringe upon this patent. The suit is targeting the Pentium II processor, even though this is now several generations old.

All Computers, which was founded in 1971 by Mers Kutt – the man responsible for introducing the world's first personal computer, the MCM-70, in 1973 – had offered to license the patent to Intel, but had no response, said the company on Thursday.

"We believe the suit is without merit and plan a vigorous defence," Intel spokesman Chuck Mulloy told CNET News.com.

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