When the chickens come home to roost: the licensed foundry defense in patent cases

In the 1970s and early 1980s, Intel and other large semiconductor companies entered into broad cross-license agreements which permitted their cross-licensees to make, use and sell devices covered by many of their patents. Recently small chip design companies have used some of these cross-licensees as foundries, providing them with their proprietary designs and buying manufactured products from them for resale to OEMs. To the surprise and chagrin of Intel, these products/spl minus/manufactured under 20 year old cross-licenses/spl minus/are now immune from suit under many of Intel\´s patents, since those patents were "exhausted" as to each chip sold by the licensed foundry at the time of that first sale. Thus, so long as the aging cross-licenses remain in effect, chip design companies can avoid many of Intel\´s/spl minus/and other large companies\´/spl minus/patents simply by purchasing otherwise infringing products from a licensed foundry.<>