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Intel Wins Massive Patent Case, Avoiding Huge Damages

Intel
(Image credit: Intel)

Intel was the victor in a massive patent trial, avoiding paying potentially billions of dollars in penalties to semiconductor design firm VLSI. Bloomberg first reported the news of the decision, made by a jury in federal court in Waco, Texas.

The two patents in question were previously owned by NXP Semiconductors until 2019, but are now held by VLSI. In the case, Case No. 6:21-cv-299, VLSI Technology LLC V. Intel Corporation, the plaintiff asked the jury to demand Intel provide $3 billion dollars in damages.

The two patents, known as the '522 patent and the '187 patent, were being used to target Intel's Speed Shift technology, which allows processors to determine frequency and voltage to allow for the best possible performance.

"Intel is pleased that the jury rejected VLSI’s meritless claims that Intel’s cutting-edge processors infringe expired patents on MP3 player technology," an Intel spokesperson told Tom's Hardware. "VLSI is a shell company created by Fortress, a Softbank-owned hedge fund, for the sole purposing of extracting billions from innovators like Intel." The statement also highlighted the company's 50,000 U.S. jobs and pushed for patent reform to prevent "litigation investors" from harming American businesses.

VLSI didn't immediately respond to inquiries to its lawyer, Morgan Chu of the California-based law firm Irell & Manella.

VLSI claimed that its patents were crucial to Intel's chip development, while Intel countered that its engineers have been doing the work for years and that the patents didn't focus on new ideas when they were issued.

The verdict is the second in a series of three trials over VLSI's patents. In March, a jury in Waco ruled that Intel had to pay $2.18 billion in damages over two other patents. Intel has claimed that it will appeal this verdict. A third trial focused on different patents is scheduled for June.

Andrew E. Freedman

Andrew E. Freedman is a senior editor at Tom's Hardware focusing on laptops, desktops and gaming. He also keeps up with the latest news. A lover of all things gaming and tech, his previous work has shown up in Tom's Guide, Laptop Mag, Kotaku, PCMag and Complex. among others. Follow him on Twitter: @FreedmanAE

  • hotaru.hino
    VLSI sues Intel but not every other modern processor manufacturer because they all have similar technology.

    Yeah, definitely smells like patent troll.

    EDIT: At the very least they should've taken on someone smaller first.
    Reply
  • gg83
    Great! I hate patent trolls and I can't see how they befit society at all. I love the quote "Intel is pleased that the jury rejected VLSI’s meritless claims that Intel’s cutting-edge processors infringe expired patents on MP3 player technology,". That made me laugh out loud!
    Reply
  • TCA_ChinChin
    Patent trolls have gotten so greedy they actually thought they could take on industry giants like Intel. I just hope that the little guys can also show it to them.
    Reply
  • Olle P
    gg83 said:
    ... "Intel is pleased that the jury rejected VLSI’s meritless claims that Intel’s cutting-edge processors infringe expired patents on MP3 player technology,". That made me laugh out loud!
    I laughed too. What's Intel's current (not so cutting edge) CPUs have to do with it?
    The law suit is all about Intel's actions back when those patents were still in effect...
    Reply
  • Gomez Addams
    TCA_ChinChin said:
    Patent trolls have gotten so greedy they actually thought they could take on industry giants like Intel. I just hope that the little guys can also show it to them.

    This is actually a rather new thing. Most companies capitulate to the trolls because usually their demands are at the level where fighting would be more expensive. Had VLSI sued for far less then Intel would probably have just said, OK because that's what most companies do. They throw a few million at them and say, "go away" and they do. Three billion is way higher stakes and obviously worth the fight.
    Reply
  • hotaru.hino
    Gomez Addams said:
    This is actually a rather new thing. Most companies capitulate to the trolls because usually their demands are at the level where fighting would be more expensive. Had VLSI sued for far less then Intel would probably have just said, OK because that's what most companies do. They throw a few million at them and say, "go away" and they do. Three billion is way higher stakes and obviously worth the fight.
    Even if Intel settled, VLSI may start pursuing backpay with interest, inane licensing terms, or get a judge to tell Intel to stop using said technology.
    Reply
  • rtoaht
    Olle P said:
    I laughed too. What's Intel's current (not so cutting edge) CPUs have to do with it?
    The law suit is all about Intel's actions back when those patents were still in effect...

    He isn't talking about Intel's current CPUs but the CPUs relevant to the lawsuit. Those were cutting edge for the time. On the other hand MP3 players were not known for computationally intensive and so usually manufactured with inferior technology and process node.
    Reply
  • Co BIY
    Gomez Addams said:
    This is actually a rather new thing. Most companies capitulate to the trolls because usually their demands are at the level where fighting would be more expensive. Had VLSI sued for far less then Intel would probably have just said, OK because that's what most companies do. They throw a few million at them and say, "go away" and they do. Three billion is way higher stakes and obviously worth the fight.

    This is actually a strategy of the trolls. They harass some of the smaller players into paying royalties because it is cheaper than a law suit and then use these royalty paying victims as proof that their patents are legit and respected by others when they go for the big fish.

    It's like a snow ball of victims rolling downhill. Each victim who concedes allows you to extract more from the next.

    It probably also has to do with the financialization of the trolling system in this case. VSLI had to go big because that's what they sold investors.
    Reply
  • ginthegit
    It's using loop holes in the law.

    Intel is a perfect target considering the amount of times that they have nafariously Broken laws in the past. AMD was almost put out of business by it... Saved only by the fact that Intel was sued for enough to keep them afloat.
    Reply