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Broadcom CEO Lashes Out at Intel Over Patent Lawsuit

September 06, 2000|KAREN ALEXANDER | TIMES STAFF WRITER

In an increasingly bitter dispute, Broadcom Corp.'s chief executive fired back Tuesday at giant chip maker Intel Corp., calling a lawsuit against his company part of a "troubling practice by Intel to rely on litigation as a standard business tactic."

Broadcom's Henry T. Nicholas III said it was "regrettable" that Intel "would once again resort to specious litigation in the courts rather than competition in the marketplace."

Last week, Intel filed a sweeping federal lawsuit accusing the Irvine-based chip maker of violating five of Intel's patents. It alleged that Broadcom had constructed a "carefully crafted plan" to build its business using Intel technology.

Nicholas denied the allegations, calling them "baseless."

"Broadcom firmly believes in the sanctity of intellectual property," he said. "We view this lawsuit as just the latest in a troubling practice by Intel to rely on litigation as a standard business tactic to slow not only Broadcom but any competitor who poses a serious threat to Intel in the marketplace."

Intel spokesman Chuck Malloy declined to comment on Broadcom's statement Tuesday.

Nicholas contended that the patent infringement suit stems from a suit Intel filed in Santa Clara County Superior Court in March, alleging that Broadcom had stolen trade secrets by hiring away three former Intel employees and attempting to hire a fourth. That case is pending.

Intel's federal lawsuit accuses Broadcom of stealing Intel's intellectual property by violating one patent on hardware used for high-speed digital subscriber line--or DSL--modems, another patent on the process for packaging silicon chips, and three software patents on technology for transmitting video over the Internet.

"Of the five patents asserted by Intel, four are related to areas where Broadcom conforms to widely followed industry standards," Nicholas said.

He added that Broadcom engineers believe the other patent, which relates to chip packaging, is invalid. Broadcom's chips are packaged by independent assembly companies that use the same technology that many in the industry have used "for years before Intel applied for its patent," Nicholas said.

Broadcom lost nearly 6% in Nasdaq trading Tuesday, dropping $13.81 a share to close at $228.25.

Intel shares lost more than 6%, falling $4.69 to close at $69.25 a share, also on Nasdaq.

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