(Bloomberg) – Intel Corp. was instructed to pay $ 2.18 billion by a federal jury in Texas after losing a patent infringement trial for chip-related technology, one of the largest patent damages claims in the history of the United States. Intel has promised to appeal. Intel has infringed two patents owned by VLSI Technology LLC, the Waco, Texas jury said on Tuesday. The jury found $ 1.5 billion for infringement of one patent and $ 675 million for infringement of the second. The jury rejected Intel’s denial of infringing any of the patents and its argument that a patent was invalid because it claimed to cover work done by Intel engineers. The patents were owned by Dutch chip maker NXP Semiconductors Inc., which would receive a share of any damages, the Intel attorney William Lee of WilmerHale told jurors in final arguments on Monday. VLSI, founded four years ago, has no products and its only potential revenue is this process, he said. VLSI “took two patents off the shelf that hadn’t been used for 10 years and said, ‘We want $ 2 billion,’ ‘Lee told the jury. The “outrageous” demand of the VLSI “would overwhelm true innovators”.
He argued that VLSI was entitled to no more than $ 2.2 million.
“Intel strongly disagrees with today’s jury verdict,” the company said in a statement. “We intend to appeal and we are confident that we will prevail.”
One of the patents was originally issued in 2012 to Freescale Semiconductor Inc. and the other in 2010 to SigmaTel Inc. Freescale purchased SigmaTel and was in turn purchased by NXP in 2015. The two patents in this case were transferred to VLSI in 2019, according to data compiled by the Bloomberg Act.
VLSI attorney Morgan Chu of Irell & Minella said the patents cover inventions that increase the power and speed of processors, a key issue for competition.
‘Intentional blindness’
Federal law does not require anyone to know of a patent that infringed it, and Intel purposely did not look to see if it was using someone else’s inventions, he said. He accused the Santa Clara, Calif.-Based company of “deliberate blindness.”
The jury said there was no intentional violation. A different decision would have allowed district judge Alan Albright to increase the award even further, up to three times the amount set by the jury.
Chu and NXP officials could not be reached immediately for comment. The damage claim is not so high when the billions of chips sold by Intel are taken into account, Chu said. Intel paid MicroUnity Systems Engineering Corp. $ 300 million in 2005 and in 2011 paid Nvidia Corp. $ 1.5 billion, although an agreement in this case involved a cross-technology license, he said.
“Operating companies will be disturbed not only by the size of the compensation, but also by the damage theory,” said Michael Tomasulo, a lawyer for Winston Strawn who attended the trial. “They more or less seemed to have bought the entire VLSI case.”
Damages are about half of Intel’s fourth-quarter earnings. The company has dominated the $ 400 billion chip industry for most of the past 30 years, although it is struggling to maintain that position.
The verdict is less than the $ 2.5 billion verdict obtained by Merck & Co. on a treatment for hepatitis C. It was later thrown out. Last year, Cisco Systems Inc. was instructed by a federal judge in Virginia to pay $ 1.9 billion to a small cybersecurity company that accused it of copying an appeal to steal government contracts. Cisco asked the judge for a retrial.
The case is among the few face-to-face patent trials in recent months, with many courts taking a break amid the coronavirus pandemic. He was delayed a week because of the winter storm that devastated much of Texas.
Intel tried to postpone the case because of the pandemic, but was rejected by Albright, a former patent litigator and magistrate who was sworn in as a federal judge in 2018 and quickly turned his court into one of the most popular for patent owners. file suit.
The case is VLSI Technology LLC v. Intel Corp., 21-57, US District Court for the Western District of Texas (Waco).
(Updates with comments from Intel in the sixth paragraph; other major patent verdicts in the 15th.)
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