American chip manufacturer Intel Co. has filed a suit against a Chinese competitor for infringement on its software intellectual property right (IPR) and demanding a compensation of 7.96 million US dollars.

It is the biggest IPR case in terms of compensation to the Intermediate People's Court of Shenzhen, a boomtown in south China's Guangdong Province, where the American multinational lodged its legal complaint last December.

At the request of Intel, the Shenzhen Intermediate People's Court sealed and seized all of the mentioned products and relevant reference materials on January 20, said sources from the court.

In the indictment, Intel accuses the Shenzhen Dongjin Communications Technologies Co. Ltd., a Shenzhen-based Chinese networking components maker, of copying the header files of its Inter Dialogic System Release 5.1.1 software (SR5.1.1).

The indictment said that the Chinese firm had used part of the Intel software SR5.1.1, especially the header files, in its NADKV 1.70 software, distributing it to customers and telling them to download SR5.1.1 from the Internet.

While denying any wrongdoing in the case, Li Rujiang, chairman of the board of the Shenzhen company, said his company spent more than 10 percent of the annual sales revenue on product research and development each year and possessed full intellectual property right over all its products, including NADKV 1.70 mentioned in the indictment. The program is developed independently by Shenzhen Dongjin and is selected by the Chinese Software Association as one of China's best software developments for 2004.

Li vowed to answer Intel's accusation in an active manner.