March 7 (Bloomberg) -- A U.S. judge threw out a patent- infringement lawsuit filed by a Canadian company that sought $500 million from Intel Corp., the world's biggest computer-chip maker.

U.S. District Judge Gerald Bruce Lee in Alexandria, Virginia, granted Intel's request to dismiss the case on Feb. 9. The judge said he will consider Intel's request to force closely held All Computers Inc. to pay Intel's legal fees.

Toronto-based All Computers claimed that Intel's Pentium and Celeron chips infringed a 1996 patent owned by All Computers for circuitry used to replace slower microprocessors with faster devices in computers. All Computers claimed it pioneered the technology that helped companies make faster computers. Lee said Intel didn't infringe the patent.

``We're happy the ruling supported the position we took after looking at the case,'' Intel spokesman Chuck Mulloy said in an interview.

Lawyers and an outside spokeswoman for All Computers didn't immediately return phone messages seeking comment.

All Computers was founded by Canadian Mers Kutt, who helped develop personal computers in the 1970s. The Toronto-based company hasn't made any products in about 10 years.

``The business of the business right now is to enforce this patent,'' All Computers lawyer Edward O'Connor said in May 2004.

Bad-Faith Tactics Claimed

In seeking compensation for its legal costs, Intel claimed in court papers that All Computers ``filed its case against Intel with no pre-suit investigation to speak of and then vigorously publicized the event.''

Santa Clara, California-based Intel also accused All Computers of a ``variety of bad-faith litigation tactics'' including violating court rules, misrepresenting facts to the judge and trying to ``improperly coerce'' a witness into providing testimony favorable to the company.

A hearing on the request is scheduled for April 1, according to the court docket.

Intel shares rose 43 cents to close at $25.11 in Nasdaq Stock Market trading.

The case is: All Computers Inc. v. Intel Corp., 04CV586, U.S District Court, Eastern District of Virginia.

To contact the reporter of this story: Susan Decker in Washington at at sdecker1@bloomberg.net.

Last Updated: March 7, 2005 17:00 EST