A potential crisis in the nation's computer industry was temporarily averted yesterday when a federal judge in Washington allowed Motorola Inc. to resume shipments of a key chip used in a variety of popular computer models.
The judge's decision came hours after a lower court in Texas ordered Motorola to stop making its flagship microprocessor, the 68030, because it said Motorola had illegally used certain technology from Hitachi Ltd. A microprocessor serves as the "brains" of computers and other electronic equipment, handling many of the calculations necessary for computers to perform their tasks.
Word of the Texas injunction sent shivers through the ranks of computer manufacturers like Apple Computer Inc., Hewlett-Packard Co. and Commodore International, since they could be forced to halt certain production lines if Motorola's 68030 shipments were cut off for more than a few weeks, industry observers said. Motorola is the sole supplier of the 68030, creating a dependency that already had made computer makers nervous.
Even in light of yesterday's decision by the U.S. Court of Appeals for the Federal Circuit to suspend the lower court's order, it remains unclear how long Motorola will be able to manufacture the critical chip without reaching a settlement with Hitachi.
"Can you imagine what it would be like if GM had to stop making engines because they infringed on a Toyota patent?" said Richard Shaffer, publisher of Technologic Computer Letter, a newsletter. "It would be a national emergency."
Microprocessors are so essential to computers that their entire operations revolve around how that one chip operates. It would take years to redesign a computer around a new microprocessor.
Several computer makers, including Apple, moved to calm fears yesterday by assuring that they have adequate supplies of the chip to keep their production lines rolling for some time. Hewlett-Packard claimed it had earlier been granted special rights to the disputed technology by Hitachi, which might allow Motorola to continue supplying Hewlett-Packard with the microprocessors.
Patent disputes are become increasingly common in the semiconductor industry, but rarely do they have such widespread implications. In making a semiconductor -- a complex pattern of circuitry -- manufacturers routinely draw upon technology first invented by their competitors. Typically, so-called licensing deals are struck whereby the firms swap technologies or pay small sums.
In this year-long patent case, Motorola, ironically, had fired the first shot, claiming that certain Hitachi chips included technology belonging to Motorola. Hitachi then returned fire with an attack on the prized 68030 and an allegation that a small portion of that microprocessor used Hitachi technology. "Hitachi scoured their patent portfolio and came up with this," said Palo Alto, Calif., attorney Roger Borovoy, former general counsel for Intel Corp., Motorola's chief competitor in the microprocessor market. Motorola, he said, "can only blame themselves."
Ultimately, the Texas judge found that both Hitachi and Motorola had infringed on each others' patents and in March warned that he would order Motorola to stop 68030 sales -- as he did yesterday -- if a resolution was not reached. Apple said then that it had only an eight-day supply of 68030s, according to an unconfirmed report in Electronic News, a trade journal.
Observers believe that Hitachi, in settlement talks, is trying to extract a high price from Motorola. Meanwhile, Motorola is believed to be redesigning its 68030 to avoid use of the Hitachi technology, but that could take months.