INTEL AND ADVANCED MICRO SETTLE DIFFERENCES 
(January 20th 1995) Exhausted by their seven-year war, Intel and
Advanced Micro Devices have decided that skimming their profits just
to keep lawyers in clover is a mug's game, and have settled all
outstanding issues in an agreement that is seen as something of a
victory for Advanced Micro. It agreed to pay Intel $58m, but gets a
perpetual licence to the microcode in Intel's 80386 and 80486
microprocessors, lifting the cloud that has been hanging over the
success of the Am486 parts. 

Advanced Micro agrees it has no right to copy any other Intel
microcode including the Pentium Processor, P6 microcode and 80486
in-circuit emulation microcode. The two will negotiate a new patent
cross-licence agreement to succeed the one that runs out at the end
of the year. Offsetting the $58m, Intel will pay about $18m awarded
by the arbitrator for breach of contract and will not contest the
rights granted to Advanced Micro in the arbitration award. Advanced
Micro gets the right to use foundries for Am486 products containing
Intel microcode for up to 20% of its Am486 production, and it and its
customers get a licence on Intel's Crawford 338 patent, covering
memory management. To draw a firm line under the past, the two agree
not to initiate legal action against one another for any activity
that occurred before January 6 this year. 

Intel had been seeking damages estimated at more than $1,000m, but
Advanced Micro had been seeking $2,200m in damages in its anti-trust
counter-suit. The two companies say they had been in negotiations
since October, but the talks only came to light last week. The
original dispute was triggered by an iAPX-86 second-source agreement
Intel signed with Advanced Micro in 1982 that went sour.
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