Intel 1998 Annual Report Download - page 14

ITEM 3. LEGAL PROCEEDINGS
A. LITIGATION
INTERGRAPH CORPORATION V. INTEL
U.S. DISTRICT COURT, NORTHERN DISTRICT OF ALABAMA,
NORTHEASTERN DIVISION (CV-97-N-3023-NE)
In November 1997, Intergraph Corporation ("Intergraph") filed suit in Federal District Court in Alabama generally alleging that Intel attempted
to coerce Intergraph into relinquishing certain patent rights. The suit initially alleged that Intel infringes three Intergraph microprocessor-
related
patents and has been amended to add two other patents. The suit also includes alleged violations of antitrust laws and various state law claims.
The suit seeks injunctive relief and unspecified damages. Intel has counterclaimed that the Intergraph patents are invalid and alleges
infringement of seven Intel patents, breach of contract and misappropriation of trade secrets. In April 1998, the Court ordered Intel to continue
to deal with Intergraph on the same terms as it treats allegedly similarly situated customers with respect to confidential information and product
supply. Intel's appeal of this order was heard in December 1998. In June 1998, Intel filed a motion for summary judgment on Intergraph's
patent claims on the grounds that Intel is licensed to use those patents. In July 1998, the Company received a letter stating that Intergraph
believes that the patent damages will be "several billion dollars by the time of trial." In addition, Intergraph alleges that Intel's infringement is
willful and that any damages awarded should be trebled. The letter also stated that Intergraph believes that antitrust, unfair competition and tort
and contract damages will be "hundreds of millions of dollars by the time of trial." The Company disputes Intergraph's claims and intends to
defend the lawsuit vigorously. Although the ultimate outcome of this lawsuit cannot be determined at this time, management, including internal
counsel, does not believe that the ultimate outcome will have a material adverse effect on Intel's financial position or overall trends in results of
operations.
B. ENVIRONMENTAL PROCEEDINGS
Intel has been named to the California and U.S. Superfund lists for three of its sites and has completed, along with two other companies, a
Remedial Investigation/Feasibility study with the U.S. Environmental Protection Agency ("EPA") to evaluate the groundwater in areas adjacent
to one of its former sites. The EPA has issued a Record of Decision with respect to a groundwater cleanup plan at that site, including expected
costs to complete. Under the California and U.S. Superfund statutes, liability for cleanup of this site and the adjacent area is joint and several.
The Company, however, has reached agreement with those same two companies which significantly limits the Company's liabilities under the
proposed cleanup plan. Also, the Company has completed extensive studies at its other sites and is engaged in cleanup at several of these sites.
In the opinion of management, including internal counsel, the potential losses to the Company in excess of amounts already accrued arising out
of these matters would not have a material adverse effect on the Company's financial position or overall trends in results of operations, even if
joint and several liability were to be assessed.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
12