Intel Ordered to Pay $2.2 Billion in Patent Infringement Case

Intel has been whacked with a $2.18 billion-dollar patent infringement verdict for violating two patents held by VLSI Technology LLC. The judgment is roughly a third of Intel’s net income for Q4 2020, and it represents one of the largest patent judgments ever handed down — assuming it stands on appeal.

VLSI Technology LLC is not the VLSI Technology company you may remember as an IC manufacturer a few decades back. That VLSI Technology was purchased by Philips and spun off as part of NXP. It appears that “VLSI Technology LLC” is leveraging patents now held by NXP, as that company is also receiving a share of the proceeds from this case.

Unlike the original VLSI Technology, VLSI Technology LLC has no products and does not conduct R&D. It generates revenue (at least according to Intel) solely by suing companies for infringement on old patents and Intel is the latest company to be so ensnared. VLSI Technology LLC sued Intel for multiple counts of patent infringement, though the Bloomberg article doesn’t specify which patents Intel was found to be in violation of. Intel argued, unsuccessfully, that VLSI Technology LLC is nothing but a patent troll.

The case was handled by Federal District Judge Alan Albright, who once argued against vexatious patent litigation on behalf of Newegg and other tech companies. Albright took the bench only a few years ago, but he’s transformed the West District of Texas into a veritable hotbed of patent litigation since then. More than 800 patent cases were filed in the West District of Texas last year, eight times the number filed in 2018. This development is completely separate from the longstanding patent-friendly court that has existed in the East District of Texas. That venue still sees a great many patent cases filed, but the West District now eclipses it.

The jury in the VLSI case did not find Intel guilty of willful infringement, which would have increased the damages by as much as 3x. Intel has stated that it intends to appeal. There are paywalled reports that the USPTO found in favor of Intel on February 4, 2021, and invalidated four of the claims VLSI made on the basis of prior art. It is not clear if that finding had any impact on the resolution of this case or what issues Intel will raise on appeal. During the trial, Intel argued that the patents in question were either invalid on the basis of prior art or essentially meaningless and had never been used by anyone.

There’s obviously a lot of he-said/she-said here, and not many specific facts about the claims in question. If Intel actually infringed on these patents, the award isn’t crazy given how long the infringement has gone on. If it didn’t, awards like this are just fuel on the patent troll fire.

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