Billion-Dollar Patent Suit Targets Intel's Pentium Chip

Strategic Insights -

Intel is facing a $1.5 billion lawsuit in federal court in Virginia, claiming that the company's Pentium chip infringed a 1993 patent held by All Computers Inc, a Toronto-based company founded by 71-year-old Mers Kutt, inventor of the world's first personal computer, the MCM-70. The patent, number 5,506,981, describes the basic circuitry necessary to operate high-speed microprocessors in modern circuit boards, a "pioneer patent" that "teaches" the circuitry used to control the frequency of the electricity pumped to the processor.

Key Takeaways:

  • The lawsuit, filed by the California IP law firm of Levin & O'Connor, seeks upwards of $500 million in compensatory damages and a permanent injunction, with damages potentially trebled due to alleged willful infringement.
  • The patent in question, number 5,506,981, was granted in 1993 and describes the basic circuitry necessary to operate high-speed microprocessors in modern circuit boards.
  • The MCM-70, a personal computer developed by Mers Kutt in 1973, used an Intel 8008 chip and was one of the first widgets to use a microprocessor.
  • All Computers Inc, the company behind the patent, has not had a product for 10 years and is now attempting to live off its patent, seeking damages from Intel's alleged infringement.
  • Mers Kutt, the inventor of the MCM-70, has also developed other notable technologies, including the key edit data preparation system and the All Card and All Charge Card, which gave PCs more speed and memory.
  • The federal court in Alexandria, Virginia, where the suit was filed, is known as the "Rocket Docket" due to its speed in resolving cases.

Statistics:

  • $1.5 billion, the amount Intel is facing in damages in the patent lawsuit.
  • 1993, the year the patent number 5,506,981 was granted.
  • $500 million, the amount in compensatory damages being sought by All Computers Inc.
  • $300 million per page, the rate at which the lawyers are being paid, according to the suit.
  • 1973, the year Mers Kutt developed the MCM-70, one of the first personal computers to use a microprocessor.
  • $4,500, the price of the MCM-70 in 1973.

Sources:

  • Bloomberg
  • "The Annals of the History of Computing" (IEEE)
  • Computer History Museum Core 4.1 publication
  • Levin & O'Connor law firm