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Intel Ordered to Pay $2.2 Billion in Damages for Patent Infringement

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A federal jury in Waco, Texas, ruled today that Intel must pay $2.18 billion in damages to VLSI, a semiconductor design firm, for violating two of its patents. Damages for one patent violation weigh in at $1.5 billion, while the other totals $675 million. The broader case is still ongoing, though, as VLSI has sued Intel in several states, spanning California, Delaware, and Texas, for damages associated with six other alleged patent violations. 

Intel's most recent 10K filing lists the VLSI lawsuits as ongoing litigation, noting that VLSI seeks a total of $7.1 billion in damages from all eight alleged violations, along with future royalties, attorney's fees, costs, and interest. Intel predicts that totals up to $11 billion, collectively. 

Intel commented on today's ruling, saying to Tom's Hardware, "Intel strongly disagrees with today’s jury verdict. We intend to appeal and are confident that we will prevail."

According to the Waco Tribune-Herald, one patent pertains to saving computer power, while another pertains to increasing the speed of the processor. We tracked down the patents, with the '759 patent' relating to clock speed management, while the '373 patent' describes a method to reduce the memory's minimum operating voltage. 

VLSI originally purchased the patents in question from NXP Semiconductors, which will also get an unspecified portion of the awards. However, the patents originated with Freescale Semiconductor Inc. and SigmaTel Inc., both of which were purchased by NXP Semiconductors.

Intel has denied that it violated the patents, and along with Apple, has previously filed an antitrust lawsuit against VLSI's parent company, Fortress, claiming the company had unlawfully aggregated patents. 

Intel's lawyers said in the closing arguments that VLSI has no products and that its only source of revenue is from the lawsuits, obviously implying the company is merely a patent troll. 

To keep things in perspective, while the $2.2 billion in damages is obviously high, Intel raked in $77.9 billion in revenue during 2020, so it's a manageable sum. However, it is significantly higher than the $1.2 billion fine Intel was slapped with for antitrust behavior against AMD a decade ago, and the company still disputes that fine in court today

As noted above, Intel plans to appeal the recent ruling, so we can expect this to be an ongoing fight for years to come. 

Paul Alcorn

Paul Alcorn is the Deputy Managing Editor for Tom's Hardware US. He writes news and reviews on CPUs, storage and enterprise hardware.

  • Phaaze88
    Ahh well, it's just a drop in a bucket.
    A bucket.
    Bucket.
    Reply
  • husker
    "Intel's lawyers said in the closing arguments that VLSI has no products and that its only source of revenue is from the lawsuits, obviously implying the company is merely a patent troll. "

    Ah yes, the old "well they weren't using it anyway" defense. I wonder if that defense would apply to money sitting unused in a bank vault.
    Reply
  • jwcdis
    Just a FYI, VLSI Technologies Inc. was acquired by Phillips and then NXP Semiconductors.

    The plaintiff here is VLSI Technologies LLC, a small entity that bought these 2 patents from NXP after acquisitions

    According to the court filing VLSI owns a portfolio of 160 US and foreign patents which cover “a wide variety of technologies, including integrated circuit technology”. It appears to take its name from a Silicon Valley business that was set up in the early 1980s and was ultimately acquired by Philips in 1999. A check of the USPTO assignment database shows that the company acquired the patents in a series of transactions dating back to August 2016.
    Reply
  • AtrociKitty
    husker said:
    Ah yes, the old "well they weren't using it anyway" defense. I wonder if that defense would apply to money sitting unused in a bank vault.
    Those really aren't comparable at all. For patents specifically, a company holding patents purely for legal action or pursuit of royalties ("patent trolls") are at risk of losing the ability to enforce those patents due to misuse. It's also really difficult for most companies, even ones as large as Intel, to be actively aware of patents held by trolls and not competitors. It's easy for them to hide in the cracks as an unknown with an unused patent, waiting for a company to create a potentially infringing product that provides an opportunity to sue. It might not carry the day in court, but the lack of use is a valid point. VLSI only obtained the patent to use in lawsuits like this, and not for any commercial interest.
    Reply
  • frogr
    What about the patents of a company like ARM which doesn't produce products but licenses their patents for royalty. Are their patents enforceable? What if they sold (not licensed) their patents to a different company, do the patents become unenforcable?
    Reply
  • Mandark
    I’m sure Intel will continue the lawsuit and not pay them instead
    Reply
  • Co BIY
    How can it have damages when it has no competing products ? These are very advanced Patent Trolls not the garden variety. Still leaches who add nothing to society.
    Reply
  • InvalidError
    Ultra-generic and trivial patents like the 759 really piss me off. Computers have had on-the-fly-modifiable clock frequency for 30+ years - I'm sure I'm not the only one who abused the "Turbo" button on a 8088-80286 as a slow-motion cheat in some games. All the patent does is "same crap, we just add software control" which could have been done all those years ago too if anyone wanted to bother with it and I bet somebody somewhere did just for lols.
    Reply
  • barryv88
    Another day at the office and another dirty tactic. Patrick has a lot fires to douse. Good luck.
    Reply
  • Chung Leong
    AtrociKitty said:
    Those really aren't comparable at all. For patents specifically, a company holding patents purely for legal action or pursuit of royalties ("patent trolls") are at risk of losing the ability to enforce those patents due to misuse. It's also really difficult for most companies, even ones as large as Intel, to be actively aware of patents held by trolls and not competitors. It's easy for them to hide in the cracks as an unknown with an unused patent, waiting for a company to create a potentially infringing product that provides an opportunity to sue. It might not carry the day in court, but the lack of use is a valid point. VLSI only obtained the patent to use in lawsuits like this, and not for any commercial interest.

    Of course such an argument won't carry the day in court. The notion that seeking enforcement of patent rights somehow constitutes misuse is absurd. The Patent Act specifically states that is not the case.
    Reply