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Friday, March 27, 2009, 10:00 am PT (01:00 pm ET)

NVIDIA strikes back against Intel

GPU maker NVIDIA has fired back a countersuit against Intel in response to Intel's suit to block NVIDIA from making controller chips for future generations of Intel's processors.

NVIDIA's complaint says the two companies have "met and attempted to resolve this dispute and have participated in a private mediation process." However, the matter still has not been resolved, despite what NVIDIA described as diligent efforts to come to an agreement with Intel in 2008.

Intel is insisting that its existing agreement with NVIDIA does not apply to its next generation Nehalem CPUs, the same chips Apple is now using in the new Mac Pro. This prevents NVIDIA from making a compatible chipset Apple can use in Macs based on the new processor.

Apple shifted from using Intel's support chipsets to NVIDIA last year in the unibody MacBooks, and migrated the rest of its consumer offerings, including the iMac and Mac mini, to the same NVIDIA control chip last month. Without a future roadmap for NVIDIA control chips, Apple may have to reconsider its existing strategies, which heavily leverage GPU technology with the NVIDIA-supported OpenCL.

The NVIDIA countersuit

NVIDIA maintains in its countersuit claims that "Intel has manufactured this licensing dispute as part of a calculated strategy to eliminate NVIDIA as a competitive threat."

"For years," NVIDIA's complaint states, "Intel has dominated the lucrative field of central processing units, with Intel's graphics offering being an afterthought. NVIDIA, in contrast, correctly predicted that graphics processing would become increasingly important to computer technology and pioneered sophisticated graphics products, including innovative new graphics processing units."

NVIDIA says that "after years of dominating the computer processing space, Intel found it self needing to play catch-up to NVIDIA's pioneering graphics processing technology," which resulted in Intel licensing NVIDIA's "entire patent portfolio" in 2004, in exchange for granting NVIDIA "a broad, long-term license to make chipsets for Intel's CPUs."

"Unable to compete on the merits," NVIDIA says, "Intel is now using this lawsuit to tilt the playing field decidedly in its favor." The complaint says Intel has not only blocked NVIDIA from competing by seeking to add arbitrary new exclusions to their existing agreement (specifically blocking NVIDIA from creating chipsets for CPUs that include a memory controller, as Nehalem CPUs do), but has also damaged NVIDIA's business by publicly announcing that it believes NVIDIA is not licensed to build chipsets for future Intel CPUs.

NVIDIA claims that sales of its "undisputedly licensed MCPs [control chips] to current Intel architectures are also being affected as Intel uses its public disavowal of the license to alarm customers into believing that NVIDIA's chipsets will soon be unusable with Intel platforms."

The complaint asks that Intel's rights to NVIDIA's patent portfolio under the cross license "be terminated in their entirety," depriving Intel of using NVIDIA's graphics technology as long as it blocks NVIDIA's ability to build licensed versions of chipsets compatible with Intel's latest CPUs.