Intel, VLSI Open Texas Patent Trial With Competing Narratives

A Texas federal jury heard opening arguments as Intel Corp. and VLSI Technology LLC began another round in their high-stakes patent fight over chip-making technology, with VLSI promising “a lot of evidence” that Intel infringed one of its patents.

The trial began Monday afternoon, after a panel of jurors was selected inside an Austin courtroom in the U.S. District Court for the Western District of Texas. Jurors will decide whether Intel infringed VLSI’s U.S. Patent No. 7,606,983.

It’s the third trial between Intel and VLSI over different patents related to chip-making technology in the past 15 months. The first ended with a $2.18 billion verdict for VLSI, one of the largest patent verdicts ever. Intel was cleared of infringement in the second trial.

Morgan Chu of Irell & Manella LLP, an attorney for VLSI, said the patent covers an invention that helps keep information flowing through computers. The technology helps increase speed and performance, which is key to competition, he said.

“Intel obtains enormous value from the use of the ‘983 patent,” Chu said.

Intel denies infringement and argues relevant parts of the patent, which issued in 2009, are invalid. Representing Intel, William Lee of WilmerHale said the patented technology doesn’t make sense for modern microprocessors.

“What Intel is using is the result of its own hard work, its own innovation,” Lee said.

Sat on the Shelf

VLSI is owned by investment funds with assets managed by the Softbank-owned Fortress Investment Group. It acquired various patents that once belonged to the Dutch chipmaker NXP Semiconductors on ways to speed up computers. VLSI is pursuing infringement cases against Intel in Texas, Delaware, and California.

Both sides attempted to shape the narrative during opening statements, following a playbook that has been refined through each of the trials.

Lee noted VLSI doesn’t make products and said there is no evidence that NXP used the patent in its products. Rather, Lee said the patent “sat on the shelf” until VLSI bought it and sued Intel. He added VLSI paid for the patent a fraction of what it will seek in damages.

“Intel engineers made real-world inventions that made their way into real-world products,” Lee said.

Chu painted the “criticism” of VLSI as a distraction.

“This case is about infringement by Intel,” Chu said.

Courthouse Jitters

The trial is taking place in front of Judge Alan Albright, a former patent litigator who took the bench in 2018. Albright sits in the Western District of Texas’ Waco division, where VLSI sued Intel. The suits were transferred to Austin for convenience reasons at Intel’s request.

The first two trials took place in Waco because of Covid-19 related courthouse closures in Austin.

Jury selection was overseen by Derek Gilliland, his first voir dire since being sworn in as a magistrate judge earlier this month.

“I’m probably about as nervous as most of you are,” he told prospective jurors at the opening.

The trial is expected to last at least until the end of the week.

Irell & Manella LLP, Mann Tindel Thompson, Haley & Olson PC represents VLSI. WilmerHale, Kelly Hart & Hallman LLP, and Gillam & Smith LLP represent Intel.

The case is VLSI Technology LLC v. Intel Corp., W.D. Tex., No. 19-cv-977, trial began 4/25/22.