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Court dismisses part of AMD case against Intel

All to do with jurisdiction.

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A US judge has dismissed part of AMD's lawsuit against rival Intel.

The dismissed claims cover alleged business practices of Intel that AMD says affected sales of its own microprocessors.

Intel asked to have the claims dismissed because while AMD is headquartered in the US, it manufactures its processors in Germany and assembles them in Malaysia, Singapore and China. AMD is already seeking damages through the Japanese courts, European Commission and Korea Fair Trade Commission for the same business practices that are alleged in the US lawsuit.

Because the alleged harm was suffered outside the US and AMD is seeking redress overseas, Intel argued that the allegations fall outside the jurisdiction of the US courts. AMD contended that it is not seeking such "foreign commerce claims" and that the x86 microprocessor market is a global market and that Intel's conduct in overseas markets had an effect on its business in the US.

The judge agreed with Intel: "AMD has not demonstrated that the alleged foreign conduct of Intel has direct, substantial and foreseeable effects in the US, which gives rise to its claim. AMD's allegations, taken in the light of the most favourable to AMD, describe a foreign effect and a foreign harm that have had ripple effects for the domestic market, but have not had any direct, substantial or reasonable effect which would give rise to an anti-trust claim within the jurisdictional reach of the Sherman Act. Accordingly, the court will dismiss AMD's claims based on alleged lost sales of AMD's microprocessors to foreign customers," said district judge Joseph Farnan.

An Intel spokesman said the company was "pleased that the judge appears to have agreed with our legal argument." He declined to comment further. AMD could not immediately be reached for comment.

AMD jolted the IT industry in June last year when it filed its lawsuit against Intel. The suit alleged Intel had managed to maintain a monopoly in the PC processor market by illegally coercing customers around the world into using its products.

The 48-page court filing identified 38 companies that, AMD alleged, had been coerced into using Intel processors at the expense of competing chips. Included are almost all of the large companies in the PC and server market, such as Dell, Sony, Gateway and IBM.

Among the allegations, AMD said Fujitsu Siemens was offered a "special discount" on Celeron processors in return for hiding AMD-based computers on its website, and removing references from its retail catalog. Also, at the 2004 Super Computing Show, an annual conference devoted to high performance computing, Intel offered computer makers' money to remove AMD systems from their booths.


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