3/11/2021
`
`Intel Told to Pay $2.18 Billion After Losing Patent Trial - Bloomberg
`
`Technology
`
`Intel Told to Pay $2.18 Billion After Losing Patent
`Trial
`
`By Susan Decker and Matthew Bultman
`March 2, 2021, 1:49 PM EST
`Updated on March 2, 2021, 5:32 PM EST
`
`Intel had claimed royalty demands of VLSI were ‘outrageous’
`NXP would get a share of any damage award, Intel lawyer said
`
`Intel Corp. was told to pay VLSI Technoloy LLC $2.18 billion by a federal jury in Texas after losing a
`patent-infringement trial over technoloy related to chip-making, one of the largest patent-damages
`award in U.S. history. Intel pledged to appeal.
`
`Intel infringed two patents owned by closely held VLSI, the jury in Waco, Texas, said 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 either of the patents and its argument that one patent was
`invalid because it claimed to cover work done by Intel engineers.
`
`The patents had been owned by Dutch chipmaker NXP Semiconductors Inc., which would get a cut of
`any damage award, Intel lawyer William Lee of WilmerHale told jurors in closing arguments Monday.
`VLSI, founded four years ago, has no products and its only potential revenue is this lawsuit, he said.
`
`VLSI “took two patents off the shelf that hadn’t been used for 10 years and said, ‘We’d like $2 billion,”’
`Lee told the jury. The “outrageous” demand by VLSI “would tax the true innovators.”
`
`He had argued that VLSI was entitled to no more than $2.2 million.
`
`https://www.bloomberg.com/news/articles/2021-03-02/intel-told-to-pay-2-18-billion-after-losing-texas-patent-trial
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`Intel Told to Pay $2.18 Billion After Losing Patent Trial - Bloomberg
`3/11/2021
`“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.”
`
`Intel fell 2.6% to $61.24 in New York trading. The stock is up 23% since the beginning of the year.
`
`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, according to data compiled by Bloomberg Law.
`
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`VLSI lawyer Morgan Chu of Irell & Manella said the patents cover inventions that increase the power
`and speed of processors, a key issue for competition.
`
`‘Willful Blindness’
`
`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, he said. He accused the Santa
`Clara, California-based company of “willful blindness.”
`
`The jury said there was no willful infringement. A finding otherwise would have enabled District Court
`Judge Alan Albright to increase the award even further, to up to three times the amount set by the jury.
`
`“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,” Michael Stolarski, chief executive of VLSI, said in an e-
`mailed statement.
`
`https://www.bloomberg.com/news/articles/2021-03-02/intel-told-to-pay-2-18-billion-after-losing-texas-patent-trial
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`Intel Told to Pay $2.18 Billion After Losing Patent Trial - Bloomberg
`3/11/2021
`Officials with NXP couldn’t immediately be reached for comment.
`
`The damage request isn’t so high when the billions of chips sold by Intel are taken into account, Chu
` MicroUnity Systems Engineering Corp. $300 million 2005 and in 2011 paid Nvidia
`said. Intel paid
`Corp. $1.5 billion even though a settlement in that case involved a cross license of technoloy, he said.
`
`“Operating companies are going to be disturbed by not only the size of the award but also the damages
`theory,” said Michael Tomasulo, a Winston Strawn lawyer who attended the trial. “They more or less
`seemed to have bought the entire VLSI case.”
`
`The damage award is about half of Intel’s fourth-quarter profit. The company has dominated the $400
`billion chip industry for most of the past 30 years, though it’s struggling to maintain that position.
`
`The verdict is smaller than the $2.5 billion verdict won by Merck & Co. over a hepatitis C treatment. It
`was later thrown out. Last year, Cisco Systems Inc. was told by a federal judge in Virginia to pay $1.9
`billion to a small cybersecurity companies that accused it of copying a feature to steal away
`government contracts. Cisco has asked the judge for a new trial.
`
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` the few in-person patent trials in recent months, with many courts pressing
`The case is among
`pause amid the coronavirus pandemic. It was delayed a week because of the winter storm that wreaked
`havoc across much of Texas.
`
` by Albright, a
`Intel had sought to postpone the case because of the pandemic, but was rejected
`former patent litigator and magistrate who was sworn in as a federal judge in 2018 and has quickly
`turned his courtroom into one of the most popular for patent owners to file suit.
`
`The case is VLSI Technoloy LLC v. Intel Corp., 2157, U.S. District Court for the Western District of
`Texas (Waco).
`
`— With assistance by Laurel Brubaker Calkins, and Ian King
`
`(Updates with VLSI comment in 12th paragraph. An earlier version corrected the spelling of law firm name
`in eighth paragraph.)
`
`https://www.bloomberg.com/news/articles/2021-03-02/intel-told-to-pay-2-18-billion-after-losing-texas-patent-trial
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`3/11/2021
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`Intel Told to Pay $2.18 Billion After Losing Patent Trial - Bloomberg
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