Motorola Told to Stop Selling Chip

By Andrew Pollack
The New York Times

San Francisco -- March 29, 1990 -- Ruling in a bitter patent dispute, a Federal judge today ordered Motorola Inc. to stop selling what is perhaps its most important computer chip: the microprocessor used in machines made by Apple Computer Inc., Sun Microsystems Inc., the Hewlett-Packard Company and Next Inc.

The judge said the microprocessor, known as the 68030, infringed a patent held by Hitachi Ltd. of Japan.

At the same time, Judge Lucius D. Bunton of Federal District Court in Austin, Tex., said Hitachi was infringing three Motorola patents. He ordered Hitachi to stop selling and marketing its H8/532 microcontroller, a simpler chip used in facsimile machines, copiers and other electronic appliances.

He also ordered Hitachi to pay Motorola $1.9 million and Motorola to pay the Japanese company $500,000 for infringing each other's patents.

Judge Bunton's decision appears aimed at getting the companies to cross-license their patents and settle the dispute. In issuing his decision today, he chastised both for not settling by now.

Analysts and computer industry officials say they expect Motorola to be forced to settle soon to avoid interrupting supplies of the 68030.

''Hitachi has an extremely powerful weapon at this point, and basically can force Motorola to settle on whatever terms they want,'' said Michael Slater, the editor of the Microprocessor Report, an industry newsletter published in Palo Alto, Calif. ''The H8 is nowhere near as important to Hitachi as the 68030 is to Motorola.''

Key to Many Machines

Indeed, the 68030 is the electronic brain of the most-powerful Apple Macintosh computers - the IIci, IIcx, SE/30 and the new IIfx. It is also the core of the only computer sold by Next Inc., the company started by Steven P. Jobs. Sun and Hewlett-Packard also use the chip in work stations, although they have other products that use different chips and are less dependent on that chip.

A spokeswoman for Apple said today that the company was ''confident that the parties will resolve the matter quickly before it has any impact on our inventories.'' She added: ''We always keep some inventory in stock for vital sole-sourced parts. So there will not be any immediate impact.''

The H8 chip, by contrast, accounts for about 1 percent of Hitachi's worldwide semiconductor sales of nearly $3 billion, said Osamu Naito, a Hitachi spokesman. Moreover, it has not been a big seller in the United States, the market in which Hitachi is banned from selling the chip.

Once Cooperated

Hitachi and Motorola once cooperated in the semiconductor industry, and Hitachi was a licensed manufacturer of Motorola's 6800 and 68000 microprocessors, predecessors of the chip involved in the dispute.

But in January 1989, Motorola, based in Schaumburg, Ill., sued Hitachi for patent infringement. Hitachi countersued, using as a weapon a patent of its own.

Several other lawsuits and countersuits have since been filed, and some remain unresolved. These include a charge that Motorola's 88000 microprocessor, which uses reduced instruction set computing, or RISC technology, infringes the same Hitachi patent that the 68030 was found to infringe. They also include a charge by Motorola that the H16, a more powerful successor to the H8, violates Motorola's patents.

The dispute is one of many involving patents in the chip business.

Hitachi said in a statement today that it was ''gratified'' by the ruling but that it was considering whether to appeal the part that went against it. A Motorola spokesman could not be reached for comment.