Intel asked to pay VLSI $2.18 billion in a Patent Infringement Trial
Intel Corp. lost a Patent Infringement trial related to a technology related to chip-making. Intel lost to VLSI Technology LLC and is asked to pay $2.18 billion by the Federal jury in Texas. The damage being asked to pay is one of the largest in US history concerning Patents.
The Jury observed that Intel has infringed two patents owned by VLSI finding $1.5 billion for infringement of one patent and $675 million for the other. The argument by Intel regarding the denial of infringement of either of the patents was rejected by the Jury. Intel contended that the claim of the patent in question was directed to the work done by the Intel Engineers, which too was rejected by the Jury.
Intel lawyer William Lee of Wilmar Hale said in the closing argument that the patents had been owned by Dutch chipmaker NXP Semiconductors Inc., which would get a cut of any damage award. VLSI, founded four years ago, has no products and its only potential revenue is this lawsuit. The outrageous demand by VLSI would tax the true innovators.
"Intel strongly disagrees with today's jury verdict," the company said in a statement. "We intend to appeal and are confident that we will prevail." The decision also affected Intel's stock which fell by 2.6% to $61.24 in the New York trading despite being up 23% this year.
As per the data compiled by Bloomberg Law, one of the patents was originally issued in 2012 to Freescale Semiconductor Inc. and the other in 2010 to SigmaTel Inc. Freescale bought SigmaTel and was in turn bought by NXP in 2015. The two patents, in this case, were transferred to VLSI in 2019.
VLSI lawyer said that the patents cover inventions that increase the power and speed of processors, a key issue for competition. He added that the Federal law doesn't require someone to know of a patent to be found to have infringed it, and Intel purposely didn't look to see if it was using someone else's inventions, accusing Intel of "willful blindness", which was not accepted by the Jury
The Chief Executive of VLSI, Michael Stolarski said, "We are very pleased that the jury recognized the value of the innovations as reflected in the patents and are extremely happy with the jury verdict,"
Intel has dominated the Chip Industry in the world. It is not the first time, Intel has been told to pay huge damages. In 2005, Intel paid Micro Unity Systems Engineering Corp. $300 million as damages. In 2011, Intel paid Nvidia Corp. $1.5 billion.
There have been cases where the court had awarded huge damages. Merck & Co. won a $2.5 billion verdict over the Hepatitis C treatment. A federal Judge in Virginia ordered Cisco Systems to pay $1.9 billion to small cybersecurity companies that accused it of copying a feature to steal away government contracts.