Intel has avoided drawn-out litigation by agreeing to a proposed settlement in a class-action lawsuit that accused the chip maker of making misleading statements about the power of some of its Pentium processors.
While saying the lawsuit had no merit to begin with, Intel executives said the company opted for a settlement in order to avoid time-consuming and costly court proceedings.
The lead attorney representing consumers in the case, on the other hand, hailed the settlement as an important victory that sheds light on the practice among chip makers of using benchmarks to falsely represent the performance of microprocessors.
One industry watcher, meanwhile, dismissed the case as largely irrelevant.
Under the proposed settlement made public in early August, Intel agreed to give a $US50 rebate to users who purchased a PC between October 23, 1995 and January 5, 1996, equipped with Intel 120MHz and 133MHz Pentium Overdrive processors.
Intel in January 1996 publicly admitted that a bug discovered in the beta compiler used to generate benchmark results led it to overstate the results of the SPECint92 benchmark for certain processors by about 10 per cent.
A few weeks later the company was hit with several class action lawsuits in several states which eventually were combined into one lawsuit.
The settlement, which will be finalised in a court hearing scheduled for October 3, also calls on Intel to provide consumers with more information about its benchmark test practices representing the OverDrive processor, including upgrade compatibility information provided by the manufacturers of PCs.
The plaintiff's attorney praised that part of the settlement as the more significant result of the court action.
"It forces Intel to tell consumers exactly on what kind of system the benchmarks have been calculated," said Terry Gross, the plaintiff's San Francisco-based lead attorney.
"It sends a message to other manufacturers that they have to disclose exactly how they reach the results of benchmarks."
Gross said many chip makers do not take into account performance upgrades made by systems makers when they state the results of benchmarks and compare them to the same benchmark tests reached with older, slower systems.
"They are not comparing apples with apples," Gross said. "Intel's disclosures were only the tip of the iceberg.
A number of other manufacturers do the same thing, but Intel is one of the worst."
While it is not clear how many 120MHz and 133MHz Overdrive Pentiums were sold in the three-month period, one industry analyst said the lawsuit and the settlement are largely irrelevant.
"Nobody paid more for a PC because of Intel's [benchmark] statements and nobody's system ran slower because of it either," said Nathan Brookwood, microprocessor analyst at market researcher Dataquest.
"The benchmarks in question are largely irrelevant in the PC market and nobody typically is buying a system based on these numbers."
Brookwood dismissed Gross' statement about misleading use of benchmarks as an attempt to increase the significance of the case.
"[Gross] is just trying to puff himself up," Brookwood said.
As part of the settlement Intel also agreed to pay Gross a total of $US1.5 million for attorney fees and expenses.
Further details on the settlement including how to obtain the rebate or how to opt out of the agreement can be found at: www.intel.com/ procs/support/pentium/certif/certif.htm/.