Intel to pay $2.18B to VLSI for patent infringement

Intel has been ordered to pay $2.18 billion to VLSI Technology, after a federal jury found the major chip producer had infringed on a pair of patents.

The jury in the Western District of Texas delivered the verdict on Tuesday, declaring Intel had infringed on both of the patents under scrutiny. The decision requires Intel to pay $1.5 billion for one of the patents, and $675 million for the other.

The figure is at the top end of the scale VLSI apparently sought. While not mentioned in court filings by the lawyers, sources of Waco Tribute Herald say the range VLSI wanted was between $750 million and $2.2 billion.

The lawsuit was brought by VLSI Technology, which received both of the patents from NXP Semiconductors, which owns the company. The patents cover ways to improve the power and speed of processors using specific designs, reports Bloomberg.

The patents were originally issued to Freescale Semiconductor and SigmaTel, which were eventually bought by NXP in 2015. The patents were then transferred to VLSI in 2019.

VLSI put forward the argument saying that Intel hadn't paid reasonable royalties since it "incorporated NXP's inventions into its own chips," said VLSI lawyer Morgan Chu in opening arguments.

The chip giant countered denying there was infringement at all, as Intel doesn't use technology from either patent. Furthermore, Intel accused the USPTO of failing to detect the patent's concepts were already in use at Intel in the first place when the patents were issued.

Intel argued that VLSI was founded only four years ago, had no products, and was only seeking revenue through a lawsuit, similar to a patent troll. Intel lawyer William Lee declared VLSI "took two patents off the shelf that hadn't been used for 10 years and said 'We'd like $2 billion."

The insinuation that VLSI was a young non-practicing entity is odd, as the company has been around since 1979. It was one of the earlier companies in the electronic design automation industry, which helped with the creation of integrated circuits and PCBs, and has a background in ASICs.

VLSI has a long history with Apple, as the two companies and Acorn worked together to create Advanced RISC Machines Ltd, also known as ARM, in 1990. ARM's designs went on to become commonplace throughout the computing industry, and are at the heart of Apple Silicon.

The lawsuit is one of the few patent trials to take place due to the ongoing COVID-19 pandemic, despite Intel's attempt to postpone the case because of it. The trial was delayed, but only by a week due to a winter storm in Texas.

Social distancing measures were in play, including the spreading out of the seven jurors and the use of masks, face shields, and hand sanitizer.

Limitations were placed on the number of spectators and lawyers. While both sides each had 20 lawyers listed on the docket, only three from each legal team were present in the courtroom.

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6 Comments

22july2013 3725 comments · 11 Years

About 3 years ago

Maybe the anticipation of this verdict was the reason why the CEO of Intel was recently let go.

sflocal 6133 comments · 16 Years

Anything coming out of the Western (or Eastern) district of Texas should be immediately suspected as fraudulent. It's a patent-troll's paradise and the judge that got caught "shopping" his services to patent-trolls should be removed.

lkrupp 10521 comments · 19 Years

sflocal said:

Anything coming out of the Western (or Eastern) district of Texas should be immediately suspected as fraudulent. It's a patent-troll's paradise and the judge that got caught "shopping" his services to patent-trolls should be removed.

Judicial hellhole is the proper terminology I believe. The Illinois county I live in has been called a judicial hellhole for decades because of spectacularly onerous jury awards for personal injury cases. In one case the defense was able to prove the plaintiff was lying through her teeth about how she was injured but the jury still awarded her money ‘for her trouble’. She should have been charged with perjury.

flydog 1140 comments · 14 Years

sflocal said:

Anything coming out of the Western (or Eastern) district of Texas should be immediately suspected as fraudulent. It's a patent-troll's paradise and the judge that got caught "shopping" his services to patent-trolls should be removed.

Congrats, you easily win stupidest post of the day, and definitelty a finalist for stupidest post of the year.

First, a jury decided this case, not a judge. Judges don't unilaterally get to decide who wins.

Second, no one has ever suggested that a judge in one of these districts is corrupt (because there is zero evidence that's ever been the case). These districts do have plaintiff friendly rules and extremely fast calendars, but they must still establish that they hold a vald patent and that the defendant infringed on that patent.

Third, there is not such thing as a "patent troll." If you own a valid patent you can enforce it by suing those who infringe on it. There is nothing fraudulent or illegal about it, and even non-practicing entities can own and enforce patents. If you don't like it write your congressman.

Last, it might surprise you given that you are lacking in knowledge and reasoning ability, and clearly didn't bother to read the article, but VLSI is about as far from "patent troll" as it gets:

The insinuation that VLSI was a young non-practicing entity is odd, as the company has been around since 1979. It was one of the earlier companies in the electronic design automation industry, which helped with the creation of integrated circuits and PCBs, and has a background in ASICs.

VLSI has a long history with Apple, as the two companies and Acorn worked together to create Advanced RISC Machines Ltd, also known as ARM, in 1990. ARM's designs went on to become commonplace throughout the computing industry, and are at the heart of Apple Silicon.

In fact, VLSI was acquired by Philips, which later spun off the company as NXP Semiconductors. The argument that VLSI is an NPE is rooted in the fact that it is used as a holding company by NXP, which is stupid because (a) the fact that a patent-holder is a NPE means nothing, and (b) it is common for companies to own subsidiaries or entities that serve purely to hold assets such as real estate, equipment, and intellectual property.

flydog said:

sflocal said:

Anything coming out of the Western (or Eastern) district of Texas should be immediately suspected as fraudulent. It's a patent-troll's paradise and the judge that got caught "shopping" his services to patent-trolls should be removed.

Congrats, you easily win stupidest post of the day, and definitelty a finalist for stupidest post of the year.

First, a jury decided this case, not a judge. Judges don't unilaterally get to decide who wins.

Second, no one has ever suggested that a judge in one of these districts is corrupt (because there is zero evidence that's ever been the case). These districts do have plaintiff friendly rules and extremely fast calendars, but they must still establish that they hold a vald patent and that the defendant infringed on that patent.

Although I like seeing pillars torn down, and although I think most of your post was good, part of your post seemed bad. You criticized him for saying that he said the judge decided who won. You even implied that he was claiming the judge was corrupt. He didn't say any of those things.

When he talked about "shopping" he was potentially talking about the process BEFORE the trial where the judge makes himself available to the patent owner for a specific case. I'm not sure if that's what he meant, but either way, part of your post seemed overly assumptive.

You probably interpreted his word "removed" as "fired", but it could equally have meant "removed from this case before it started and replaced with a more fair judge."