IT Confidential: Patent Woes And A Good Grudge Match

Working directly with customers makes more sense, Dell said.

InformationWeek Staff, Contributor

October 11, 2002

3 Min Read

Are things bottoming out for tech-industry employment? That's the encouraging news from a recent study by the AeA, "Special Midyear 2002 Tech Employment Report," released last week. Formerly known as the American Electronics Association, AeA says tech employment peaked in March 2001 at 5.7 million jobs and has fallen every month through June 2002. The last half of last year saw the loss of 280,000 jobs, and the first half of 2002 saw another dramatic drop of 113,000 jobs, according to the report. Tech employment fell by 437,000 jobs, or 8%, between January 2001 and June 2002. The good news? Only 700 high-tech jobs were lost between May and June 2002, according to the report, the smallest monthly job loss since March 2001.

Intel took one on the chin last week when a federal judge in Texas ruled in favor of former workstation vendor Intergraph in a dispute, filed in April of last year, over patents related to technology in the Itanium processor. District Court Judge John Ward ruled that Intergraph's patents, which cover parallel instruction computing, are "valid and enforceable" and that Intel's products "literally infringe" those patents, according to a statement from Intergraph, which exited the hardware business several years ago. Earlier this year, Intel paid Intergraph $300 million to settle a lawsuit Intergraph brought in 1997 over Intel's use of technology that Intergraph developed for its proprietary Clipper chip. At that time, Intel agreed to pay Intergraph $150 million if it lost the most recent suit and another $100 million if it appeals the ruling and loses. Intel will appeal.

Lexmark, the printer company, last week issued a revised earnings forecast for its fiscal third quarter, ended Sept. 30, that included an "asset impairment" related to "the abandonment of a customer relationship management software project," according to a statement. Lexmark said it will write off $15.8 million for the failed project. Still, it sees revenue growth of 4% to 5% over last year's third quarter, which it will report Oct. 21.

Speaking of Lexmark, Hewlett-Packard CEO Carly Fiorina blasted Dell Computer for thinking it could make money with its deal to resell Lexmark printers. "Dell announces a strategy and everyone assumes they'll be successful," Fiorina told attendees at the Gartner Symposium ITxpo in Orlando, Fla., last week, referring to Dell as merely "a channel of distribution for someone else's product." Michael Dell took the same stage the next day and said there was plenty of room for price-cutting in the printer market. "Look at any other market Dell has gone into," Dell said. "We've been able to significantly save money for customers."

That's more like it -- a good, old-fashioned grudge match! Since the tech recession, everyone's been so nice to each other. Let the heated words fly! And the industry tips to [email protected] or phone 516-562-5326. If you want to talk about tech jobs, patents, or failed projects, meet me at's Listening Post:

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