View John Dvorak's comments on the AMD Intel Lawsuit

The Delaware District Court where AMD filed its US monopoly maintenance antitrust suit against Intel last year threw out 50%-60% of AMD's allegations on Tuesday.

The decision was in response to a long-shot motion that Intel filed this past June saying that the US lacked jurisdiction over chips made and sold overseas. The court sided with Intel and said it didn't have jurisdiction.

Well, AMD didn't take the potentially devastating ruling lying down. In a bit of quick creative lawyering the next day at a scheduling hearing with the judge and Intel, AMD lawyers reportedly tried getting around the decision by contending that the judge didn't really trash their charges; he merely limited the amount of damages AMD might collect if it wins the case. Intel of course begged to differ.

The judge himself may have been startled by AMD's interpretation of his decision and handed the matter off to the court's special master.

AMD may appeal the judge's ruling depending on whether the special master lets it present evidence collected overseas. It obviously wants the context.

Anyway, in their June motion Intel's lawyers argued that AMD is seeking recovery for sales lost on microprocessors it made in Germany and tried to sell in Europe and Japan. They also pointed out that AMD is seeking legal redress in Japan and has complained to both the European Commission and the Korean Fair Trade Commission about Intel.

In its own defense, AMD retorted that the x86 market is a single worldwide market - a point on which much hangs - that its product was designed and engineered in the states, that its litigation in foreign venue doesn't impact US jurisdiction and that Intel's behavior overseas had a domestic rebound that amounted to restraint of trade, "neutering" AMD and making it less able to compete in the US.

The AMD suit charges Intel with anticompetitive practices and alleges that it forced major customers into both exclusive and non-exclusive deals and conditioned discounts on their willingness to boycott AMD.

In its 17-page decision, the Delaware court said it considered the allegations in a "light most favorable to AMD," despite the "twists and turns" of AMD's logic, and still came to the conclusion that it lacks jurisdiction.

The court decided that AMD "has not demonstrated that the alleged foreign conduct of Intel has direct, substantial and foreseeable effects in the United States which gives rise to its claim."

Direct is the operative word here as in "direct causal chain."

The court basically found there are too many degrees of separation between a deal Intel might have struck with a German retailer to promote Intel systems in Europe and any domestic impact on AMD to plead Sherman Antitrust violations, especially since "AMD has not alleged that Intel's conduct resulted in a substantial and direct domestic effect."

Judge Joseph Farnan said AMD is pleading lost foreign sales caused by Intel's alleged conduct overseas and US "courts have recognized that reduced income flowing from a foreign subsidiary to a domestic parent is not a direct domestic effect or injury." In other words, "ripple effects" won't play.

AMD of course still has what remains and whatever it can get out of the special master. Judge Farnan Wednesday scheduled the trial to start in April of 2009. AMD wanted September of 2008.

--Copyright Client/Server News