Intel told to pay $2.18 billion to VLSI Technology for infringing two patents

Intel accuses VSLI of patent trolling, says it will appeal

A federal court in the US has ordered chipmaker Intel to pay $2.18 billion in damages to VLSI Technology for infringing two of its patents.

According to Bloomberg, a federal jury in Waco, Texas, ruled on Tuesday that Intel had infringed two patents related to data processing system technology owned by Fortress Investment Group's VLSI Technology.

The jury found that damages caused to VLSI on infringement for one patent amounts to $1.5 billion, while damages for another patent totals $675 million.

In its lawsuit, VLSI had alleged that Intel used VLSI's technology in some of its processors without properly compensating it.

The two patents that Intel is said to have infringed were originally issued to Sigma Tel and Freescale Semiconductor, according to Bloomberg.

Freescale acquired Sigma Tel in 2008, and was in turn acquired by NXP in 2015. The patents were eventually transferred to VLSI in 2019.

VLSI was founded in 1979 and was acquired by Philips in 1999 for $1 billion. Today, it is part of the Philips spin-off NXP Semiconductors.

Attorney Morgan Chu, of Irell & Manella, who is representing VLSI in the case, told the court that the patents infringed by Intel cover inventions that help increase the speed of processors. Chu also accused Intel of wilfully violating VLSI's patents.

The jury, however, ruled that there no wilful infringement of patents by Intel.

VLSI "took two patents off the shelf that hadn't been used for 10 years and said, 'We'd like $2 billion'," Bill Lee of Boston, who is representing Intel in the case, told the jury.

The "outrageous" demand by VLSI "would tax the true innovators," he added.

Lee argued that VLSI was entitled to no more than $2.2 million.

Michael Stolarski, chief of VLSI Technology, told Bloomberg that the firm was "pleased that the jury recognised the value of the innovations as reflected in the patents and are extremely happy with the jury verdict".

Intel said that it "strongly disagrees" with the verdict and will appeal the case.

Earlier in 2019, Intel filed a lawsuit against Softbank-backed Fortress Investment Group, accusing it of seeking billions in damages across its various patent suits. Intel said that Fortress was building up a 'patents bank' and interfering with manufacturing firms' product plans via lawsuits.

The chipmaker claimed that Fortress and the other companies it controls have used patents acquired from NXP Semiconductors to file a series of legal cases against Intel.

According to Intel, Fortress was claiming that nearly every processor launched by Intel since 2011 have infringed the patents acquired by Fortress.

Intel alleged in the complaint that Fortress had acquired control of more than 1,000 technology patents from US companies. It said that Fortress' behaviour was anti-competitive as it was driven by the idea that the cost to purchase the patents would be much less than the amount manufacturing firms would have to pay to Fortress to avoid patent infringement lawsuits.

Intel has also challenged VLSI patents with the Patent Trial and Appeal Board.