In response to a suit by Intel last month, the graphics chip-maker Nvidia Corp has filed a countersuit, alleging that Intel has violated a four-year-old cross licensing contract and made ambiguous statements undercutting Nvidia's licensing rights.

Nvidia's grievance epitomizes the latest barrage in a spiraling row between the two chipmakers - with the dispute having moved from the marketplace to the courtroom.

Nvidia said in its countersuit that the licensing clash has been "manufactured" by Intel, and is a part of a premeditated tactic to get rid of Nvidia as a competitive threat. While Intel has sought to check Nvidia from selling its chipsets that function alongside Intel's new microprocessors.

Nvidia says it is fully licensed to continue manufacturing products that interrelate with Intel microprocessors.

Arguing that the contract covers future central processing units (CPUs), Nvidia said that Santa Clara, California-based Intel has denied the license covers those chips. In the opinion of Nvidia officials, devoid of a licensing agreement, the integrated graphics chips' line up from Intel infringes upon Nvidia's patent portfolio.

In a statement, Nvidia CEO Jen-Hsun Huang said: "We must defend ourselves and the rights we negotiated for when we provided Intel access to our valuable patents. Intel's actions are intended to block us from making use of the very license rights that they agreed to provide."