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Intel said it would pay $ 2.18 billion after losing patent attempts

(Bloomberg) – Intel Corp. was ordered to pay VLSI Technology LLC $ 2.18 billion by a federal jury in Texas after losing a patent infringement procedure due to technology related to chip manufacturing, one of the largest patent damages awards in U.S. history. Intel promised to appeal. Intel infringed two patents owned by close VLSI, the jury in Waco, Texas, said on Tuesday. The jury found $ 1.5 billion for infringement of one patent and $ 675 million for infringement of the other. The jury rejected Intel’s denial of infringement of any of the patents and its argument that a patent was invalid because it claimed that it covered work performed by Intel engineers. The patent had been owned by Dutch chipmaker NXP Semiconductors Inc., which would cut all claims, said Intel lawyer William Lee of WilmerHale to jurors in a closing argument on 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 had not been used in ten years and said, ‘We would like $ 2 billion,'” Lee told the jury. The “outrageous” demand from VLSI “would tax the true innovators.” He had claimed that VLSI was entitled to a maximum of $ 2.2 million. “Intel strongly disagrees with today’s jury,” the company said in a statement. “We intend to appeal and are convinced that we will win.” Intel fell 2.6% to $ 61.24 in New York trading. The share has increased by 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 acquired SigmaTel and was in turn acquired by NXP 2015. The two patents in this case were transferred to VLSI 2019, according to data compiled by Bloomberg Law. 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. ‘Wanted Blindness’ Federal law does not require anyone to know of a patent for having been found to have infringed it, and Intel deliberately did not look to see if it used anyone else’s inventions, he said. He accused Santa Clara, a California-based company, of “intentional blindness.” The jury said there was no intentional violation. A discovery would otherwise have enabled District Court Judge Alan Albright to increase the price further, up to three times the amount determined by the jury. “We are very pleased that the jury recognized the value of the innovations, which is reflected in patents, and are extremely pleased with the jury’s ruling,” said Michael Stolarski, CEO of VLSI, in an email. Officials with NXP could not be immediately reached for comment. The claim is not so high when billions of chips sold by Intel are taken into account, Chu said. Intel paid MicroUnity Systems Engineering Corp. $ 300 million in 2005 and Nvidia Corp paid $ 1.5 billion in 2011 even though a settlement in that case meant a cross-license for technology, he said. “Operating companies will be disturbed by not only the size of the price but also the theory of damages,” said Michael Tomasulo, a lawyer from Winston Strawn who attended the trial. “They more or less seemed to have bought the entire VLSI case.” The damage price is about half of Intel’s fourth quarter, which has dominated the $ 400 billion chip industry for most of the past 30 years, although it has struggled to maintain that position, less than Merck & Co’s 2. $ 5 billion for a hepatitis C treatment. It was later dropped. Last year, Cisco Systems Inc. was ordered by a federal judge in Virginia to pay $ 1.9 billion to a small cybersecurity company that accused it of copying a feature to Cisco has asked the judge for a new trial The case is among the few personal patent lawsuits in recent months, with many courts pausing in the middle of the coronavirus pandemic. It was delayed by a week due to the winter storm that ravaged large parts of Texas Intel had tried to postpone the case due to the pandemic, but was rejected by Albright, a former patent litigant and judge who swore in as a federal judge. ch has quickly turned its courtroom into one of the most popular for patent holders to sue. The case is VLSI Technology LLC v. Intel Corp., 21-57, U.S. District Court for the Western District of Texas (Waco). (Updates with VLSI commentary in the 12th paragraph. An earlier version corrected the spelling of the law firm’s name in the eighth paragraph.) For more articles like this, visit us at bloomberg.comSubscribe now to stay ahead of the most trusted news source. © 2021 Bloomberg LP