Graphics chip firm sues over loss of contract

Graphics chip firm sues over loss of contract
Tom Foremski
3D graphics chip firm 3Dfx Interactive has filed a lawsuit against Sega Enterprises and NEC over the loss of a major contract with Sega for providing graphics chips in a future video game console. About one month ago, Sega told 3Dfx that it had cancelled a contract that would have produced custom chips based on 3Dfx technology for a video game console and which 3Dfx claims would have generated $55m in revenues.
3Dfx has charged Sega and NEC with breaching the contract, unfair competition and misappropriation of trade secrets. The lawsuit claims that Sega entered into the contract knowing that it would use the NEC chips, with the intention of gaining access to 3Dfx technology and its future plans. NEC is accused of encouraging Sega to break the contract.


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