Intel vs VLSI Patent Case: U.S. Appeals Court Overturns $2.18 bn Verdict

In a significant turn of events, a U.S. appeals court has reversed a staggering $2.18 billion patent-infringement award previously secured by VLSI Technology against Intel Corp, marking a pivotal moment in the history of U.S. patent law.
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The decision, handed down by the U.S. Court of Appeals for the Federal Circuit, effectively nullified the 2021 jury verdict that found Intel in infringement of a VLSI patent. The case has been remanded to Texas for a fresh trial to reassess the extent of Intel’s infringement on a second VLSI patent and determine the appropriate compensation.

VLSI, owned by investment entities managed by Fortress Investment Group, saw this verdict reversal but has not yet responded to requests for comment on the ruling.

An Intel spokesperson expressed satisfaction with the ruling and highlighted the forthcoming argument during the new damages trial, emphasizing their stance on the perceived value of VLSI’s patent.

This legal saga stems from VLSI’s allegations of patent infringement by Intel across various U.S. courts, focusing on patents covering semiconductor technology.

Initially, a jury in Waco, Texas, granted VLSI a monumental $2.18 billion award, indicating that Intel’s microprocessor technology encroached upon patents obtained by VLSI from Dutch chipmaker NXP Semiconductors.

However, the Federal Circuit’s ruling cited insufficient evidence supporting the jury’s finding of Intel’s infringement concerning one of the contested patents, which accounted for $675 million of the initial verdict.

While the court affirmed Intel’s infringement of another VLSI patent, it called for a fresh trial due to issues with the damages assessment, which previously resulted in a $1.5 billion award to VLSI.

The impact of this legal tussle reverberated in the stock market, with Intel witnessing a more than 4 percent decline on Monday morning. Similar dips were observed among other major chipmakers.

This legal clash between Intel and VLSI comprises multiple trials across different U.S. jurisdictions. Intel emerged victorious in a subsequent Waco trial where VLSI aimed for over $3 billion in damages. Another trial in Austin awarded VLSI nearly $949 million from Intel in a separate patent case last year.

Both companies decided to dismiss a potential multi-billion-dollar case in Delaware. However, the legal proceedings are far from over, with another trial scheduled in Northern California set to commence in 2024.

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