A Delaware judge on Monday shot down an attempt by New York authorities to obtain confidential information from a lawsuit between Nvidia Corp. and rival chipmaker Intel Corp. as they investigate alleged anticompetitive behavior by Intel.
An antitrust official with the New York attorney general's office told Vice Chancellor Leo Strine Jr. that Nvidia is reluctant to answer questions in the investigation because of fears it might violate a protective order issued by Strine preventing disclosure of confidential information exchanged in the lawsuit.
Intel sued Nvidia in 2009 in a dispute over whether Nvidia had the right to keep making a type of chip that used an Intel design without a new license deal. Nvidia countersued, claiming it was covered by a deal the companies struck in 2004. The suit was settled earlier this year, with Intel agreeing to pay Nvidia $1.5 billion for the right to certain patents.
Now, New York authorities as part of their antitrust investigation are trying to gain information about Intel from confidential documents that were exchanged with Nvidia in the lawsuit.
"This is knowledge the corporation has and is available," said Richard Schwartz, acting bureau chief of the New York attorney general office's antitrust bureau.
But Strine repeatedly pressed Schwartz to identify exactly what information was being sought, and to justify why Strine should modify or lift the protective order. Schwartz, who indicated that the investigation was prompted by a complaint from Nvidia, was unable to satisfy the judge's concerns.
Strine noted that the confidential information was provided by Intel only to Nvidia's outside counsel solely for the purpose of the Delaware litigation, not to company officials or attorneys. He also said investigators were free to ask Nvidia executives who have not been privy to the information covered by his protective order about what they otherwise have come to know or believe about Intel in the normal course of business, but that they had failed to do so.
"This is Orwellian in the extreme," said Strine, suggesting that investigators wanted to obtain confidential Intel information from the lawsuit, turn it over to Nvidia officials who have never seen it before, then ask them what they think about it.
"You're trying to make them your sled dog. This is ridiculous," Strine said. "Do you think that was Intel's expectation, that Nvidia could just turn around and funnel stuff to whoever they wish?"
While expressing his respect for law enforcement, Strine said the civil litigation system depends on parties being able to exchange confidential information in good faith. He suggested they should be able to do so without the fear that the government could use its power to try to thwart the process.
"I have concerns about the direction of this in a big way," the judge said.
New York filed an antitrust lawsuit against Intel in federal court in Delaware in 2009, but Schwartz said after Monday's hearing that the current investigation was not related to that lawsuit. "This is an entirely separate matter," he said.