Doan v Advanced Microdevices Inc

[2004] NSWSC 216

CITATION:

DOAN & ANOR v ADVANCED MICRODEVICES INC & ORS [2004] NSWSC 216

HEARING DATE(S):

28 November 2003

JUDGMENT DATE:

26 March 2004

JUDGMENT OF:

Levine J

DECISION:

1. I decline to order the first and third defendants to provide answers to the interrogatories the subject of the application. I order the plaintiffs to pay the costs of the first and third defendants.; 2. I place the matter in the Registrar's 9am List on Wednesday 31 March 2004.

CATCHWORDS:

Interrogatories - necessity - s7A trial issues

LEGISLATION CITED:

s7A Defamation Act 1974

CASES CITED:

Howard Brown v Australian Broadcasting Corporation (Hunt J, unreported, 6 February 1987)
Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49
Griffith & Ors v Australian Broadcasting Corporation & Ors [2003] NSWSC 298
Howard v Nationwide Publishing Services Pty Ltd (Hunt J, unreported, 26 February 1987)
Palmer v John Fairfax & Sons Ltd (1986) 5 NSWLR 727
Spasojevic v Riznic [1982] 1 NSWLR 278
Webb v Bloch (1928) 41 CLR 331

PARTIES :

NGAT DOAN
(First plaintiff)

TYN ELECTRONICS PTY LTD (FORMERLY KNOWN AS APD INTERNATIONAL PTY LTD)
(Second plaintiff)

v

ADVANCED MICRODEVICES INC
(First defendant)

PENTON MEDIA AUSTRALIA PTY LTD
ACN 095 358 802
(Second defendant)

PAUL BROWN
(Third defendant)

FILE NUMBER(S):

SC 20431 OF 2002

COUNSEL:

P Gray SC
(Plaintiffs)

D Caspersonn
(First defendant)

T Blackburn SC
(Third defendant)

SOLICITORS:

Verekers
(Plaintiffs)

Tress Cocks & Maddox
(First defendant)

Minter Ellison
(Third defendant)

[2004] NSWSC 216

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

JUSTICE DAVID LEVINE

FRIDAY 26 MARCH 2004

20431 OF 2002

NGAT DOAN
(First plaintiff)

TYN ELECTRONICS PTY LTD (FORMERLY KNOWN AS APD INTERNATIONAL PTY LTD)
(Second plaintiff)

v

ADVANCED MICRODEVICES INC
(First defendant)

PENTON MEDIA AUSTRALIA PTY LTD
ACN 095 358 802
(Second defendant)

PAUL BROWN
(Third defendant)
JUDGMENT (Interrogatories – necessity – s7A trial issues)

1 This is an application by the plaintiff for orders that the first and third defendants answer certain interrogatories delivered in relation to the issue of publication.

2 The nature of the action is as set out in the amended statement of claim filed on 11 July 2003 consequent upon my ruling in the matter [2003] NSWSC 560, 25 June 2003.

3 The area of concern may be exemplified by reproducing paragraph 8 of the pleading that makes the allegation in relation to the publication of the first matter complained of:

8 On or about 6 May 2002, the Defendants published of and concerning the Plaintiffs in New South Wales and in each of the states and territories of Australia the first matter complained of, reproduced as Schedule A.

Particulars of Publication by the First Defendant
The publication of the first matter complained of by the Second Defendant was authorised or intended by the First Defendant, or was the natural and probable result of the First Defendant through its employee John Girvan or otherwise, or through the Third Defendant and/or its solicitors Baker and McKenzie, giving to the Second Defendant the information which appears in lines 2 to 22 and 26 to 54 of the first matter complained of.
Particulars of Publication by the Second Defendant
The first matter complained of was published by the Second Defendant as an article entitled “$3 million marketing scam exposed”, accompanied by a large colour photograph of the First Plaintiff carrying the caption “APD MD Ngat Doan”, on pages 5, 7 and 59 of the issue of “CRN Australia” dated 6 May 2002. The Plaintiffs do not know, but expect to establish from discovery or interrogatories, the distribution and readership of “CRN Australia”.
Particulars of Publication by the Third Defendant
The publication of the first matter complained of by the Second Defendant was authorised or intended by the Third Defendant, or was the natural and probable result of the Third Defendant giving to the Second Defendant the information which appears in lines 2 to 22 and 26 to 54 of the first matter complained of.

4 On 29 July 2003 the first defendant filed its defence in relation to s7A issues.

5 Paragraph 9 of that defence states:

9 In answer to paragraph 8 of the Statement of Claim the First Defendant: -
(a) Denies that it published the first matter complained of;
(b) Denies the balance of this paragraph insofar as it relates to the First Defendant; and
(c) Does not admit this paragraph insofar as it relates to the conduct of the Second and Third Defendants.

6 The third defendant in his s7A defence filed on 8 August 2003 states in paragraph 3 the following:

3 In answer to paragraph 8 of the amended statement of claim, the third defendant:
(a) denies that:
(i) he published the first matter complained of;
(ii) he authorised or intended the first matter complained of to be published; and
(iii) the publication was the natural and probable result of the third defendant providing any information to the second defendant;
(b) otherwise does not admit the allegations.

7 The second defendant in its defence filed on 3 September 2003, in paragraph 4, states:

4 In answer to paragraph 8 of the Statement of Claim, the Second Defendant admits that it published an article entitled “Three million dollar marketing scam exposed” (which was in substantially the same form as Schedule A) on pages 5, 7, and 59 of the issue of CRN Australia magazine dated 6 May 2002, but otherwise does not admit the matters alleged therein. The Second Defendant makes no admissions as to the matters alleged against the other Defendants.

8 On 13 July 2003 and 3 September 2003 the first defendant received, and answered, respectively, the following 4 interrogatories:

1 Did you provide to the Second Defendant any of the information in the first matter complained of?

1A The First Defendant objects to answering this interrogatory on the grounds that it does not relate to any matter in issue and/or is vexatious and oppressive in that the interrogatory is vague and general and does not seek any relevant admissions in accordance with the legal principles concerning publication and is liable to confuse the jury in performing its role under s7A of the Defamation Act 1974.

2 If the answer to interrogatory 1 above is yes, which information in the first matter complained of did you provide to the Second Defendant, and by whom on your behalf was such item provided?

2A Not applicable.

3 Did you provide to the Second Defendant any of the information in the second matter complained of?

3A The First Defendant objects to answering this interrogatory on the ground that it does not relate to any matter in issue and/or is vexatious and oppressive in that the interrogatory is vague and general and does not seek any relevant admissions in accordance with the legal principles concerning publication and is liable to confuse the jury in performing its role under s7A of the Defamation Act 1974.

4 If the answer to interrogatory 3 above is yes, which information in the second matter complained of did you provide to the Second Defendant, and by whom on your behalf was each such item provided?

4A Not applicable.

9 The third defendant, on 15 July 2003 and 12 September 2003, received and answered, respectively, the following interrogatories:

1A Did you provide to the Second Defendant any of the information in the first matter complained of?
1B The third defendant objects to answering this interrogatory on the following bases:
(a) It is vexatious and oppressive.
(b) All communications between the third defendant and any servant or agent of the second defendant occurred on an occasion of client legal privilege, such privilege being that of the first defendant which has not been waived.
2A If the answer to interrogatory 1 above is yes, which information in the first matter complained of did you provide to the Second Defendant, and on whose behalf were you acting in doing so?
2B Not applicable.
3A Did any partner or employee of Baker and McKenzie provide to the Second Defendant any of the information in the first matter complained of?
3B The third defendant objects to answering this interrogatory on the following bases:
(a) It is vexatious and oppressive, and does not relate to any matter at issue in the proceedings.
(b) All communications between the third defendant, or partners or employees of Baker and McKenzie, and any servant or agent of the second defendant occurred on an occasion of client legal privilege, such privilege being that of the first defendant which has not been waived.
4A If the answer to interrogatory 3 above is yes, which information in the first matter complained of was so provided to the Second Defendant, and on whose behalf were such persons(s) acting in doing so?
4B Not applicable.
5A Did you provide to the Second Defendant any of the information in the second matter complained of?
5B The third defendant objects to answering this interrogatory on the following bases:
(a) It is vexatious and oppressive.
(b) All communications between the third defendant and any servant or agent of the second defendant occurred on an occasion of client legal privilege, such privilege being that of the first defendant which has not been waived.

6A If the answer to interrogatory 5 above is yes, which information in the second matter complained of did you provide to the Second Defendant, and on whose behalf were you acting in doing so?
6B Not applicable.
7A Did any partner or employee of Baker and McKenzie provide to the Second Defendant any of the information in the second matter complained of?
7B The third defendant objects to answering this interrogatory on the following bases:
(a) It is vexatious and oppressive, and does not relate to any matter at issue in the proceedings.
(b) All communications between the third defendant, or partners or employees of Baker and McKenzie, and any servant or agent of the second defendant occurred on an occasion of client legal privilege, such privilege being that of the first defendant which has not been waived.

8A If the answer to interrogatory 7 above is yes, which information in the second matter complained of was so provided to the Second Defendant, and on whose behalf were such persons(s) acting in doing so?
8B Not applicable.

10 The second defendant in its answers to interrogatories admitted publication and receipt of information in relation to the first matter complained of from Mr John Girvan and identified by reference to the matter complained of the information received from that source. Similarly, in relation to the second matter complained of the second defendant provided answers to the interrogatories relating to whether it received information and its source and what that information was by reference to the matter complained of.

11 It will be seen that the third defendant asserts privilege in some of its objections to answering interrogatories. In this regard an affidavit of Alix Conybeare sworn 8 October 2003 was read (in one respect over objection). It is to be remembered that that the third defendant is said to have been at all material times a partner in the firm of Baker & McKenzie and acted as solicitor for the first defendant.

12 Ms Conybeare deposes to her being in the employ of Messrs Minter Ellison (solicitors for the third defendant) and that in February 2002 Baker & McKenzie had been retained by the first defendant in relation to the conduct of an investigation into the plaintiffs in connection with a number of invoices which the second plaintiff had submitted to the first defendant, amongst other things, purporting to be from the second defendant for advertisements in the second defendant’s magazine. According to Ms Conybeare the invoices were submitted to the first defendant for reimbursement pursuant to a distributorship agreement between the first defendant and the second plaintiff (APD).

13 The first defendant (AMD) gave the third defendant (Brown) certain instructions and information as to the matters of the invoices to enable an investigation and “the retainer generally” to be carried out. Ms Conybeare asserts two reasons for confidentiality: first, the instructions and information involved allegations of a commercially sensitive nature both because they involved imputations of wrongdoing by a distributor and because of the importance of avoiding giving publicity to such matters to prevent recurrences. The second basis of confidentiality attending the communications was that any leakage would cause evidence to be destroyed or otherwise compromise the investigation.

14 Between mid-February 2002 and mid-April 2002 two employed solicitors of Baker & McKenzie had several telephone communications with David Richards and Andrew Milligan in the course of which the latter two gentlemen provided statements in relation to the invoices. Scarlet Reid and Bronwyn Forsyth made communications in the course of preparing such statements, the purpose of the preparation of which was for use in civil and criminal proceedings and to advise the first defendant as to its rights of recovery. The first defendant terminated the distributorship in April 2002. In August 2002 the second plaintiff commenced proceedings in the Supreme Court against the first defendant and another entity in the Commercial list. The third defendant in the current defamation action acts for the defendants in the Commercial list proceedings.

15 In October 2002 the defendants in the Commercial list proceedings issued cross-claims against the plaintiffs seeking recovery of the sums paid to the second plaintiff in payment of the invoices.

16 Ms Conybeare deposes to the first plaintiff having been arrested, in May 2003, and charged with 47 counts under s176A Crimes Act (Director or officer cheat or defraud company). Proceedings consequent upon arrest were to be listed in the Local Court on 24 October 2003.

17 For completeness I append hereto as appendix A and appendix B, the first and second matters complained of.

18 As I remarked at the outset, the interrogatories are in relation to the issue of publication. This being the point of focus, a lot of the matters raised in submissions, for example in connection with the import of the decisions of Hunt J in Spasojevic v Riznic [1982] 1 NSWLR 278, Howard Brown v Australian Broadcasting Corporation (Hunt J, unreported, 6 February 1987), Howard v Nationwide Publishing Services Pty Ltd (Hunt J, unreported, 26 February 1987), Palmer v John Fairfax & Sons Ltd (1986) 5 NSWLR 727, while of value, are not strictly to the point. His Honour was in those cases concerned with the nature and extent of interrogatories in relation to qualified privilege or matters in defeasance.

19 The first and third defendants appeared at first to be under a misapprehension as to the basis on which the plaintiff was seeking to make each liable for the publication by the second defendant. It was assumed that the interrogatories sought to obtain admissions on the basis that the plaintiffs were seeking to establish accessorial liability on the principles set out in Webb v Bloch (1928) 41 CLR 331. In that case the parties were responsible for the malice of one of their number because each was responsible as a publisher and had approved the publication. That is not quite the situation here, so the plaintiffs contend.

20 Here the situation is that the first and third defendants are sought to be made liable to the plaintiff by reason of the republication by the second defendant of material which each of the first and third defendants provided to it, authorising the republication or knowing and intending that it be republished by the second defendant, or in circumstances where it is the natural consequence of the publication by the first and third defendants to the second defendant that the second defendant would republish.

21 When one reads the particulars of publication allocated to each of the first and third defendants, this, so it seems to me, is the only basis on which the plaintiff could have each found to be liable, not as principals but as persons who fall into that peculiar category discussed by me in Griffith & Ors v Australian Broadcasting Corporation & Ors [2003] NSWSC 298 at para [19].

22 That being so, conformably with my decision in Griffith, the issues going to the liability in the first and third defendants for the republication by the second defendant of the matter admittedly published by the second defendant are not matters for resolution by the jury pursuant to s7A of the Defamation Act.

23 On its face it thus appears that at the actual s7A trial the issues will only be between the plaintiff and the second defendant and those issues will be whether or not that which was published by the second defendant carried the imputations pleaded by the plaintiff and whether those imputations, if carried, are defamatory. That being so, it could hardly be argued that it is “necessary” for either of these defendants to answer these interrogatories for the purpose of the s7A trial (SCR Pt 24 r 5(2)).

24 I decline to order the first defendant to answer the interrogatories on the basis that they do not relate to any matter in issue as between the first defendant, the plaintiffs and the second defendant for the purposes of that which is to be litigated in the s7A trial. It is not “necessary” for the first defendant to answer those interrogatories.

25 As to the third defendant, strictly the same considerations apply. In the light of the decision of the High Court in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 it is appropriate that the common law be applied to determine whether or not there is available the asserted claims of privilege.

26 The Evidence Act is concerned with the adducing of evidence. Presently we are concerned only with answers to interrogatories. It is not necessary for me to decide this issue. It may well have to be litigated itself in some way. However, as between the third defendant and the second defendant the information provided in Ms Conybeare’s affidavit is deficient; as the plaintiff asserts that affidavit provides no foundation for any information provided by the third defendant to the second defendant to which client legal privilege could attach. The plaintiffs argue that there has been a “waiver” by reference to what the second defendant admits it to have published in terms of the words being attributable to an officer of the first defendant and the third defendant, and the matter complained of showing a willing participation in the publication. Whether that which “appears” is in fact the “reality” might also, as I have suggested, have to be determined elsewhere.

27 Finally I would add that I do not understand that any of the authorities to which I have made reference above, being the decisions of Hunt J, would found the asserted “oppression” given, first, the particulars of publication which the plaintiffs have benefit good enough to set out and the terms of the interrogatories themselves.

28 I decline to order the first and third defendants to provide answers to the interrogatories the subject of the application. I order the plaintiffs to pay the costs of the first and third defendants.

29 I place the matter in the Registrar’s 9am List on Wednesday 31 March 2004.

APPENDIX A

[photograph of Ngat Doan with caption "APD MD Ngat Doan"]

A three-month investigation by CRN and a team of lawyers, audit specialists and international investigators has uncovered a multi million dollar channel racket in the IT channel.

Chipmaker AMD was the victim of a marketing rebate scam involving Australian component distributor APD International.

Investigators working with a legal firm Baker McKenzie have prepared documents which indicate that, over a period of several years, APD International had been obtaining a benefit by deception in that invoices obtained form media companies and elsewhere were falsified for the purposes of obtaining marketing rebates from AMD.

The scam is understood to have netted more than $3 million.

The NSW Commercial Crime Agency (CCA) is believed to be about to investigate APD.

Among the documents which have been handed over to CCA are several sworn statements and more than 100 false invoices.

Baker McKenzie investigators, including former Federal Police officers, are also making

inquiries into a Sydney based media company and advertising agency

linked with several IT vendors.

The investigation was prompted after auditors for AMD in the US and Singapore became suspicious of media rebate claims being made by APD International.

An investigation across three continents discovered hundreds of false claims for media advertising. In many cases original invoices issued by IT media companies had been overstated by as much as 300 percent for the purpose of claiming inflated vendor rebates.

APD managing director Ngat Doan is described in ASIC documents as being both a director and company secretary of APD International, which is based in Silverwater, NSW. Doan, a Vietnamese national, was first listed as a director of APD International in 1996.

John Girvan, director of internal audits and control for AMD in the US, said that his company initiated the investigation last year following queries of invoices supplied by APD International. “AMD became suspicious when irregularities were noticed in invoices supplied

by APD to AMD.

“We flew an audit team to Australia and what we discovered was major irregularities. We subsequently put together an investigation team spanning Asia and Australia. Evidence was collected indicating that APD had been obtaining a benefit through the deception of AMD”.

Paul Brown, a partner in the international legal practice at Baker McKenzie, has been heading the legal side of the investigation. He said “ We have been investigating APD International and related companies for several months. We have collected hundreds of invoices that indicate to us that APD has been involved in systematic deception.”

CRN is aware that AMD has been presented with false invoices for marketing rebates. The invoices presented to AMD were not original invoices and had media organisation mastheads “cut and pasted” onto them.

In each of these instances, the original invoice figure had been changed to a higher amount than had first been invoiced. CRN has in its possession copies of 43 false invoices.

Of 29 of those invoices, the originally billed amount for media placements was $17,900. APD International changed the invoices and presented them to AMD as being copies of original invoices totalling $110,315.

Several other invoices in CRN’s possession show that original amounts have been exaggerated by as much as 300 percent.

In one case, the original media invoice for $1900 has been presented as $4500. In another case, an amount of $2900 has been changed to $6000 for a single page of advertising. “We are currently investigating several organisations, including marketing companies, media buying companies and advertising agencies”, said Brown.

Investigators have questioned distributor Express Data over APD making up allegedly false purchase orders for products from Express Data. The purchase orders – ostensibly for products to be used in bundling deals with AMD processors – would then be shown to AMD and APD would claim a rebate from AMD. When CRN put the allegations to Ngat Doan that he and his company had been involved in the falsification of marketing rebate invoices, he said: “I know of no such allegations: You need to ask AMD about this”. “We have not been involved in any problems associated with marketing rebates or any other claims”, he said.

Express Data managing director Ross Cochrane said the distributor was recently approached by a legal firm representing AMD and was shown documents that appeared to be false. "These documents were for the purchase of products from Express Data”, he said.

In May 2000, CRN revealed that Perth-based distributor Direct Memory Access (DMA) had received shipments from APD containing 170 Athlon processors that had been remarked.

Microprocessor re-marking is a process by which a supplier tampers with a chip’s casing and inner workings to over-clock the processor and them labels it as a chip with a higher clock speed than the manufacturer intended.

AMD AND APD: THE BACKGROUND

APD International was terminated as an AMD distributor late last month. Prior to its termination, APD managing director Ngat Doan claimed the company was responsible for 70-80 percent of AMD’s distribution in Australia. The distributor was distributing a minimum of 15,000-20,000 AMD pieces per month, according to Doan.

Late last month Doan said he had been planning for the event [APD’s termination notice] for the past three months. He said that although he was no longer doing business with AMD his business would be “stronger than ever”.

“My hand is free, I don’t have to be controlled by anybody who can tell me what product to sell”, he said. Doan said he had money and “things to do on my hand now”.

He said that he now had a choice of products to choose from and his hands were no longer tied. “Now I can do it my way, control [the business] on my hand, not other people…I knew this was going to happen”, he said.

He said that AMD and his company had different ideas about marketing the chip manufacturer’s products in Australia.

Doan also claimed APD International had been spending $40,000-$50,000 per month promoting AMD products in the Australia-New Zealand market. APD was targeting revenues in excess of $100 million in the local market for its year ending June 30, 2002.

Ngat Doan, 49, started Beam Computers in the early 1980’s, originally as a distributor for Acer Computer.

He had arrived in Australia in 1975 and holds a degree in electrical engineering from the Queensland University of Technology. Less than two years before starting his degree in the late 1970’s, Doan worked as a storeman and packer during the day, while he learnt to speak

English at night.

APPENDIX B

A three-month investigation by CRN Australia and a team of lawyers, audit specialists and international investigators has uncovered a multi million dollar marketing rebate racket in the IT channel.

Chipmaker AMD was the victim of a marketing rebate scam involving Australian component distributor APD International.

Investigators working with a legal firm Baker McKenzie have prepared documents which indicate that, over a period of several years, APD International had been obtaining a benefit by deception in that invoices obtained form media companies and elsewhere were falsified for the purposes of obtaining marketing rebates from AMD.

The scam is understood to have netted more than $3 million.

The NSW Commercial Crime Agency (CCA) is believed to be about to investigate APD.

Among the documents which have been handed over to CCA are several sworn statements and more than 100 false invoices.

Baker McKenzie investigators, including former Federal Police officers, are also making inquiries into a Sydney based media company and advertising agency linked with several IT

vendors.

The investigation was prompted after auditors for AMD in the US and Singapore became suspicious of media rebate claims being made by APD International.

An investigation across three continents discovered hundreds of false claims for media advertising. In many cases original invoices issued by IT media companies had been overstated by as much as 300 percent for the purpose of claiming inflated vendor rebates.

APD managing director Ngat Doan is described in ASIC documents as

being both a director and company secretary of APD International, which is

based in Silverwater, NSW. Doan, a Vietnamese national, was first listed as

a director of APD International in 1996.

John Girvan, director of internal audits and control for AMD in the US, said that his company initiated the investigation last year following queries of invoices supplied by APD

International. “AMD became suspicious when irregularities were noticed in invoices supplied

by APD to AMD.

“We flew an audit team to Australia and what we discovered was major irregularities. We subsequently put together an investigation team spanning Asia and Australia. Evidence was collected indicating that APD had been obtaining a benefit through the deception of AMD”.

Paul Brown, a partner in Baker McKenzie's international legal practice has been heading the legal side of the investigation team. He said “ We have been investigating APD International and related companies for several months. We have collected hundreds of invoices that indicate to us that APD has been involved in systematic deception.”

CRN is aware that AMD has been presented with false invoices for marketing rebates. The invoices presented to AMD were not original invoices and had media organisation mastheads “cut and pasted” onto them.

In all cases, the original invoice totals figure had been changed to a higher amount than first invoiced. CRN has in its possession copies of 43 false invoices.

Of 29 of those invoices, the originally billed amount for media placements totalled $17,900. APD International changed the invoices and presented them to AMD as being copies of original invoices totalling $110,315.

Several other invoices in CRN’s possession show that original amounts had been increased by as much as 300 percent.

In one case, the original media invoice for $1900 has been presented as $4500. In another case, an amount of $2900 has been changed to $6000 for a single page of advertising. “We are currently investigating several organisations, including marketing companies, media buying companies and advertising agencies”, said Brown.

Investigators have questioned distributor Express Data over APD making up allegedly false purchase orders for products from Express Data. The purchase orders – ostensibly for products to be used in bundling deals with AMD processors – would then be shown to AMD and APD would claim a rebate from AMD. When CRN put to Ngat Doan allegations that he and his company had been involved in the falsification of marketing rebate invoices, he said: “I know of no such allegations: You need to ask AMD about this”.

“We have not been involved in any problems associated with marketing rebates or any other claims”, he added.

Express Data managing director Ross Cochrane said the distributor was recently approached by a legal firm representing AMD and was shown documents that appeared to be false. "These documents were for the purchase of products from Express Data”, he said.

In May 2000, CRN revealed that Perth-based distributor Direct Memory Access (DMA) had received shipments from APD containing 170 Athlon processors that had been remarked.

Microprocessor re-marking is a process by which a supplier tampers with a chip’s casing and inner workings to over-clock the processor and them labels it as a chip with a higher clock speed than the manufacturer intended.

The distributor quarantined 100 of the re-marked, over-clocked chips while recalling 50 back from customers. Around 20 were still not accounted for.

At the time, DMA webmaster Jai Ketteridge said the company purchased the re-marked units from APD International.

Ketteridge said that it was likely that the re-marked units were shipped from one of APD’s suppliers, without APD knowing that the products had been remarked.

However, AMD’s John Robinson said at the time: “This would not be the case. Processors like those found by DMA would not have been shipped out of an AMD manufacturing plant.”

Ketteridge said the casing on some of the 170 re-marked Athlon processors had been repainted, which is an obvious sign of re-marking. Resistors on chip PCBs had been tampered with, upping the CPU speed multiplier, while some chips had also the CPU voltage changed via resistors on the main logic board. “They’ll solder a few things, put on a few labels and make 700MHz chip out of a 500MHz,” said Ketteridge at the time.

Tampering with a chip unit can also affect performance. The chip will appear to run normally, but components are working harder and the failure rate of the chip increases, said

Ketteridge.

“It has financially hurt us and our resellers. It also has the potential to harm AMD’s reputation,” he said.

When contacted by CRN in May 2000, APD’s Ngat Doan declined to confirm that APD had received a shipment of re-marked chips. “I have to leave it to AMD [to sort out],” he said. “I ask you not to put information in your magazine, I would appreciate that,” he said.- 1 -

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Last Modified: 03/30/2004