In a major legal development, the U.S. Court of Appeals for the Federal Circuit has nullified a $2.18 billion patent-infringement judgment that patent holder VLSI Technology secured against Intel Corp in 2021. This reversal represents one of the largest verdict reversals in the annals of U.S. patent law. The Federal Circuit’s decision has thrown out the jury’s verdict that found Intel guilty of infringing a VLSI patent.
As a result of the decision, the case has been remanded to Texas for a new trial to determine the amount Intel must pay for infringing a second VLSI patent. VLSI Technology, which holds patents in the semiconductor technology domain, is owned by investment funds managed by Fortress Investment Group. It is notable that Mubadala Investment Co of Abu Dhabi agreed to acquire a majority stake in Fortress from Japan’s Softbank Group earlier this year.
While representatives for VLSI have not responded to requests for comment on the ruling, an Intel spokesperson expressed the company’s satisfaction with the outcome. Intel intends to argue during the new damages trial that VLSI’s patent holds little value.
The patent dispute between VLSI and Intel has encompassed multiple lawsuits across various U.S. jurisdictions, with VLSI accusing Intel of infringing several semiconductor technology-related patents. The first trial, held in Waco, Texas, resulted in a substantial $2.18 billion award to VLSI. The jury determined that Intel’s microprocessor technology had violated patents acquired by VLSI from Dutch chipmaker NXP Semiconductors.
The Federal Circuit’s decision on Monday centered on the finding that there was insufficient evidence to support the jury’s conclusion that Intel had infringed one of the two patents in question, accounting for $675 million of the initial verdict.
Although the appeals court affirmed that Intel had infringed another VLSI patent, it argued that deficiencies in the damages analysis necessitated a fresh trial to establish the correct compensation amount. In the original trial, the jury had awarded VLSI $1.5 billion in damages for Intel’s violation of that patent.
Intel’s stock experienced a decline of more than 4% in the wake of the Federal Circuit’s ruling, with other major chipmakers also witnessing declines. It is worth noting that Intel had previously triumphed over VLSI’s pursuit of over $3 billion in damages in a different Waco jury trial in 2021. In a separate ruling in Austin, Texas, last year, a jury decreed that Intel owed nearly $949 million to VLSI in a third patent case.
The two companies have opted to dismiss another potential multi-billion-dollar case in Delaware. A forthcoming trial in Northern California is scheduled to commence in 2024.