Intel is in hot water after it has emerged that the chipmaker is guilty of infringing patented technology. The company was told to pay VLSI Technology LLC $2.18 billion by a federal jury on Tuesday in Texas after losing a patent-infringement trial over technology related to chip-making, one of the largest patent-damages award in U.S. history.
Intel has pledged to appeal.
As reported by The Verge, Intel infringed two patents owned by closely held VLSI, the jury in Waco, Texas, said Tuesday. The jury found $1.5 billion for infringement of one patent and $675 million for infringement of the second. The jury rejected Intel’s denial of infringing either of the patents and its argument that one patent was invalid because it claimed to cover work done by Intel engineers.
The patents had been owned by Dutch chipmaker NXP Semiconductors Inc., which would get a cut of any damage award, Intel lawyer William Lee of WilmerHale told jurors in closing arguments Monday. VLSI, founded four years ago, has no products and its only potential revenue is this lawsuit, he said.
VLSI “took two patents off the shelf that hadn’t been used for 10 years and said, ‘We’d like $2 billion,”’ Lee told the jury. The “outrageous” demand by VLSI “would tax the true innovators.”
He had argued that VLSI was entitled to no more than $2.2 million.
“Intel strongly disagrees with today’s jury verdict,” the company said in a statement. “We intend to appeal and are confident that we will prevail.”
Intel fell 2.6% to $61.24 in New York trading. The stock is up 23% since the beginning of the year.
One of the patents was originally issued in 2012 to Freescale Semiconductor Inc. and the other in 2010 to SigmaTel Inc. Freescale bought SigmaTel and was in turn bought by NXP in 2015. The two patents in this case were transferred to VLSI in 2019, according to data compiled by Bloomberg Law.
VLSI lawyer Morgan Chu of Irell & Manella said the patents cover inventions that increase the power and speed of processors, a key issue for competition.