SGI Sues Graphics Chip Maker ATI Technologies

Published: October 26, 2006

by Timothy Prickett Morgan

Having just gotten itself out of chapter 11 bankruptcy and having shut down its specialized visualization product lines as part of its bankruptcy reorganization, Linux supercomputer maker and former Unix server and workstation maker Silicon Graphics still wants to make money in the graphics field it helped create. And to that end, SGI has sued ATI Technologies, the graphics chip maker that was just eaten by processor chip maker Advanced Micro Devices, for patent infringement.

SGI filed its suit Monday in the U.S. District Court for the Western District of Wisconsin, and claims that ATI's line of Radeon graphics cards make use of intellectual property that is covered by an SGI patent, which is U.S. patent number 6,650,327, or '327 for short. As is standard in these matters, SGI is asking the court to grant an injunction against ATI and is seeking unspecified economic damages from ATI's use of the patented technology.

"The company's technology covered by the '327 patent is an important resource in achieving enhanced graphics processing demanded by today's computer systems," explained Dennis McKenna, SGI's chief executive officer, in the announcement of the lawsuit against ATI. "SGI has licensed this technology to ATI's major competitors and, as I have previously been stating publicly, SGI intends to aggressively protect and enforce its IP. This is the first visible step in that process."

On Wednesday, AMD completed its $5.4 billion acquisition of ATI, which it announced at the end of July. AMD paid $4.3 billion in cash and the remainder of the balance came from 58 million shares of AMD stock. AMD bought ATI so it could more tightly integrate central and graphics processing, thereby gaining a competitive edge over rival Intel. These future products are known by the code-name "Fusion," and the first products of this effort are expected on the market in 2007. This is perhaps worth all the cash AMD has shelled out. But it is a bit more costly than perhaps AMD gambled for. Now, AMD is also going to have to either pay some lawyers to defend itself or to settle the suit with SGI.

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