Daedalus Prime sues TSMC, Qualcomm, Samsung using patents bought from Intel

[Fred Chen]

Samsung, TSMC in US patent infringement investigation

Complaint filed by Daedalus Prime – wasn't he a Transformer?

www.theregister.com

Intel must have been very financially strapped to actually sell these patents to a non-practicing entity, who is now using them to sue TSMC and Samsung, as well as Qualcomm. It's a pity, perhaps Intel could have handled them better, if it had known about the possibility.

The scope is pretty significant as well, all the FinFET nodes.

 

[hist78]

Samsung, TSMC in US patent infringement investigation

Complaint filed by Daedalus Prime – wasn't he a Transformer?

www.theregister.com

Intel must have been very financially strapped to actually sell these patents to a non-practicing entity, who is now using them to sue TSMC and Samsung, as well as Qualcomm. It's a pity, perhaps Intel could have handled them better, if it had know about the possibility.

The scope is pretty significant as well, all the FinFET nodes.

Is Intel desperate? Probably yes.

Is Intel so naive to sell the FinFet related patents? Definitely not.

Pat Gelsinger and his team know very well that there are only four companies, TSMC, Samsung, Globalfoundries, and Intel, who are using FinFet technology in the manufacturing. Obviously Daedalus Prime is not one of them. Intel knows Daedalus Prime can only gain profit through licensing and lawsuits.

On the other hand, Intel can't easily sue other semiconductor companies based on such patent claims because other semiconductor companies (IDM, fablite, fabless, and foundries) may use their own patents to file countersuits against Intel. It will be very ugly and Intel can't predict the final outcome. Instead Intel uses Daedalus Prime as the frontman to do the work.

Other thoughts:

1. Even after transferring the patent to Daedalus Prime, Intel may still hold certain rights to overrule who Daedalus Prime is allowed to sue. Under the Intel new IDM 2.0 strategy, Intel may use external foundries to supplement its own fabs. It will be silly if XYZ foundry postponed or stopped the product delivery to Intel due to Daedalus Prime's lawsuits. Intel also needs to avoid being sued by Daedalus Prime because Intel is acquiring a company that is a Daedalus Prime's target.

2. Then why is TSMC sued by Daedalus Prime while TSMC is an important partner for Intel's recovery?

Probably Pat Gelsinger thinks applying the maximum frontend and backend pressure can force partners, suppliers, and customers to yield to Intel's wish. Pat Gelsinger believes Intel is strong enough to burn the bridge if necessary.

3. Then why is Globalfoundries not sued by Daedalus Prime? Is Intel acquiring Globalfoundries?

4. Then why is Qualcomm sued by Daedalus Prime? Qualcomm is a customer of the new Intel Foundry Service (IFS). Isn't it risky?

Pat Gelsinger probably thinks it can force Qualcomm to place more orders at IFS instead at Samsung or TSMC.

And see #2 above.

5. Then why is Apple not sued by Daedalus Prime while Qualcomm is?

Is Apple too big to allow Intel to burn the bridge? Or Intel hopes Apple is coming back to be an Intel customer soon?

6. Intel may get a cut from the profit generated by Daedalus Prime's lawsuits related to those Intel's old parents. If not, this potential windfall should be already priced into the contract when Intel sold the patent to Daedalus Prime.

 

[blueone]

I really despise these so-called NPEs (Non-Practicing Entities, the formal name for patent trolls). Having dealt with a few of them, this is legalized extortion. In the US, patent infringement litigation is decided in jury trials, and for any patents this technical it is impossible to find qualified jurors, so the trial outcomes are unpredictable to say the least. And they're hugely expensive because you have to hire and pay the expenses of expert witnesses and specialized litigators. The last estimate I saw was that 97% of these cases are settled out of court. That's the extortion part. These trolls know the litigation is so expensive and risky that the extortion can be expensive, hence their business case.

As for Apple, they may have a private agreement with Intel that prevents some kinds of patent litigation when they acquired Intel's 5G modem team. But I'm just guessing. There might also be other cross-licensing agreements Intel got itself into prior to selling these patents, and honoring those agreements may have been a condition of sale to Daedalus. More guessing.

What a mess.

 

[hist78]

I really despise these so-called NPEs (Non-Practicing Entities, the formal name for patent trolls). Having dealt with a few of them, this is legalized extortion. In the US, patent infringement litigation is decided in jury trials, and for any patents this technical it is impossible to find qualified jurors, so the trial outcomes are unpredictable to say the least. And they're hugely expensive because you have to hire and pay the expenses of expert witnesses and specialized litigators. The last estimate I saw was that 97% of these cases are settled out of court. That's the extortion part. These trolls know the litigation is so expensive and risky that the extortion can be expensive, hence their business case.

As for Apple, they may have a private agreement with Intel that prevents some kinds of patent litigation when they acquired Intel's 5G modem team. But I'm just guessing. There might also be other cross-licensing agreements Intel got itself into prior to selling these patents, and honoring those agreements may have been a condition of sale to Daedalus. More guessing.

What a mess.

Intel, one of the greatest semiconductor company in the history, needs a patent troll's help to get additional cash and fight against competitors.

How sad it is...

 

[Fred Chen]

Intel, one of the greatest semiconductor company in the history, needs a patent troll's help to get additional cash and fight against competitors.

How sad it is...

Surprised if TSMC had not gotten the necessary license.

 

[nghanayem]

Is Intel desperate? Probably yes.

Is Intel so naive to sell the FinFet related patents? Definitely not.

Pat Gelsinger and his team know very well that there are only four companies, TSMC, Samsung, Globalfoundries, and Intel, who are using FinFet technology in the manufacturing. Obviously Daedalus Prime is not one of them. Intel knows Daedalus Prime can only gain profit through licensing and lawsuits.

On the other hand, Intel can't easily sue other semiconductor companies based on such patent claims because other semiconductor companies (IDM, fablite, fabless, and foundries) may use their own patents to file countersuits against Intel. It will be very ugly and Intel can't predict the final outcome. Instead Intel uses Daedalus Prime as the frontman to do the work.

Other thoughts:

1. Even after transferring the patent to Daedalus Prime, Intel may still hold certain rights to overrule who Daedalus Prime is allowed to sue. Under the Intel new IDM 2.0 strategy, Intel may use external foundries to supplement its own fabs. It will be silly if XYZ foundry postponed or stopped the product delivery to Intel due to Daedalus Prime's lawsuits. Intel also needs to avoid being sued by Daedalus Prime because Intel is acquiring a company that is a Daedalus Prime's target.

2. Then why is TSMC sued by Daedalus Prime while TSMC is an important partner for Intel's recovery?

Probably Pat Gelsinger thinks applying the maximum frontend and backend pressure can force partners, suppliers, and customers to yield to Intel's wish. Pat Gelsinger believes Intel is strong enough to burn the bridge if necessary.

3. Then why is Globalfoundries not sued by Daedalus Prime? Is Intel acquiring Globalfoundries?

4. Then why is Qualcomm sued by Daedalus Prime? Qualcomm is a customer of the new Intel Foundry Service (IFS). Isn't it risky?

Pat Gelsinger probably thinks it can force Qualcomm to place more orders at IFS instead at Samsung or TSMC.

And see #2 above.

5. Then why is Apple not sued by Daedalus Prime while Qualcomm is?

Is Apple too big to allow Intel to burn the bridge? Or Intel hopes Apple is coming back to be an Intel customer soon?

6. Intel may get a cut from the profit generated by Daedalus Prime's lawsuits related to those Intel's old parents. If not, this potential windfall should be already priced into the contract when Intel sold the patent to Daedalus Prime.

I am no expert in legal matters, and the games that all of these companies play. But doesn't this seem kind of crazy? Why would intel use these guys as an intermediary to sue their partners/competitors, any settlement generated would be offset by the downsides. Also I don't think intel would even see any financial gain if these suits get settled since they aren't the ones suing. If there is a history of selling patents to these sorts of parasites specifically in an attempt to damage your competition, then let me know, because that would be interesting. If events really are transpiring as you say, then this is shortsighted and would likely cause the collapse of IFS and by extension the company itself (to say nothing of how a poor relationship with TSMC would ruin the company that already makes so much there and how intel would be more reliant on them if IFS fails).

 

[blueone]

Surprised if TSMC had not gotten the necessary license.

I doubt there was a license to be had, Fred. Here I go guessing again... I suspect that TSMC and Samsung, et al invented fabrication techniques which they felt were different enough from Intel's to be defensible, and they filed their own patents. If Intel's were first to be filed, they might even list Intel's as prior art. The US Patent Office seems to grant pretty much any application with sufficient documentation these days, and they leave the battle over infringement to the courts. The only widespread licensing I see going on is for industry standards, like, say, PCIe. Lots of companies have patents, and by joining the industry group they agree to license their applicable patents to the specifications to other members under "reasonable and non-discriminatory" (RND) terms for the rights to develop products to the specifications. The IEEE and IETF working groups are similar. Other than the industry consortium examples, licensing is usually done for business reasons, like when Intel used to give some computer companies (HP, Compaq, etc.) a "bus license" to the now obsolete "Front Side Bus", so they could design their own chipsets. Just guessing, but I think TSMC, Samsung, and GF are convinced they're innocent of infringement. Whether they go to court or settle, now that's a financial decision. Pay the ransom, or pay the attorneys and risk a judgement or a cease and desist order on product manufacturing.

 

[Fred Chen]

I doubt there was a license to be had, Fred. Here I go guessing again... I suspect that TSMC and Samsung, et al invented fabrication techniques which they felt were different enough from Intel's to be defensible, and they filed their own patents. If Intel's were first to be filed, they might even list Intel's as prior art. The US Patent Office seems to grant pretty much any application with sufficient documentation these days, and they leave the battle over infringement to the courts. The only widespread licensing I see going on is for industry standards, like, say, PCIe. Lots of companies have patents, and by joining the industry group they agree to license their applicable patents to the specifications to other members under "reasonable and non-discriminatory" (RND) terms for the rights to develop products to the specifications. The IEEE and IETF working groups are similar. Other than the industry consortium examples, licensing is usually done for business reasons, like when Intel used to give some computer companies (HP, Compaq, etc.) a "bus license" to the now obsolete "Front Side Bus", so they could design their own chipsets. Just guessing, but I think TSMC, Samsung, and GF are convinced they're innocent of infringement. Whether they go to court or settle, now that's a financial decision. Pay the ransom, or pay the attorneys and risk a judgement or a cease and desist order on product manufacturing.

It's a bit more nuanced than that. For example, the recent iPhone teardowns do reveal features of TSMC's FinFET process which may fall under the jurisdiction of the patents being cited here: https://www.inquartik.com/blog/case-daedalus-npe-litigation-patent-portfolio-analysis/

That said, I think it's not impossible to invalidate, citing even earlier patents.