AMD May Engage in Nvidia – Samsung – Qualcomm Patent War
Just a couple of months ago Nvidia began a very aggressive legal campaign against Samsung and Qualcomm in which the company has alleged that both mobile giants are infringing on several of its fundamental graphics intellectual property. This of course has resulted in the well armed legal team of the Korean giant to fire back. And now Samsung in a very aggressive move began legal action of its own to ban Nvidia products in the US.
Nvidia isn't the first or the last to try and undercut the competition based on patent infringement laws. We've seen many patent wars go off in the last few years especially in the highly volatile mobile market. Apple and Samsung are both still going at it and now Nvidia has joined the battlefront as well. So it didn't come as a shock to us to hear that AMD has been very carefully watching this unfold and calculating its next move.
AMD May Engage in The Graphics Patent War with Nvidia, Samsung and Qualcomm
During the Raymond James' Systems, Semiconductors, Software & Supply Chain Conference on December 8th. AMD's Chief Financial Officer Devinder Kumar revealed that AMD has in fact considered legal action.
Hans Mosesmann - Raymond James
I think investors are interested in seeing how this plays out with Nvidia as part of their lawsuit against the Samsung and Qualcomm regarding fundamental Graphics IP, now AMD obviously has as well a very deep portfolio of Graphics IP. Has management considered a strategy to monetize that like Nvidia is doing, and what would you need to do this and start that effort?
Devinder Kumar - SVP and CFO
Yes. We have considered that and we will explore possibilities in that area as we move forward.
The company's CFO has also stated that they will continue to explore the possibilities for monetizing the company's graphics intellectual property in the future. This typically involves licensing technology to a third party or a partner company. We see this occurring in some fashion already through AMD's semi-custom business unit. By which the company offers its clients the ability to embed specific AMD IP such as graphics into a particular product that the customer desires.
Monetizing IP can also involve legal action to demand licensing fees for the unwarranted use of the company's intellectual property by others. Devinder did not however specify in anyway whom exactly the company would target if it ever initiates a lawsuit of its own. We know that Nvidia had attempted to monetize its graphics IP in the mobile market by offering paid graphics IP licenses to companies in that space. However when that failed to get traction we saw Nvidia take legal action in an aggressive move to monetize that IP in mobility.
AMD has gone through very difficult legal battles with their much larger rival before. Corporate legal battles can span several decades and sometimes pose an insurmountable financial burden. AMD is by no means a small company nor is Nvidia but put against industry giants such as Samsung, Qualcomm and even Intel, both companies may very will appear small.
AMD has famously engaged in many legal battles with its much larger rival, Intel, and has often won. Although the legal battles more often than not entailed AMD fighting its larger rival over monopolistic or anti-competitive practices rather than IP. Which is partially thanks to the cross-licensing agreement which saved both a whole lot of trouble. Making a patent war somewhat of unexplored territory for AMD.
Even though I don't particularly appreciate patent wars, in some cases the impetus for legal action is very legitimate. As consumers all we can do is watch this unfold and hope that it doesn't dissolve into a financial sinkhole that only serves to slow down the progress of the industry.