Intel’s $2 Billion Patent Loss Survives ‘Unclean Hands’ Complaint

Intel Corp. couldn’t convince a West Texas judge that VLSI Technology LLC has “unclean hands” that prevent it from collecting a $2.18 billion patent verdict against the chip maker, the second-largest in U.S. history.

Judge Alan Albright in the U.S. District Court for the Western District of Texas denied Intel’s request that VLSI be barred from enforcing two patents on chip-making technology against it, in a sealed order entered in the court’s docket Wednesday.

VLSI was created by Fortress Investment Group. Intel said Fortress and Dutch chipmaker NXP Semiconductors hatched a scheme in which VLSI would continuously sue Intel “until either Intel capitulates or some jury awards an oversized verdict.”

Intel also accused VLSI of egregious litigation tactics, including shielding evidence and constantly changing its infringement theories. VLSI responded that its business practices and litigation conduct were “routine and perfectly appropriate.”

Jurors found in March that Intel owed $2.18 billion for infringement. Albright this week also denied Intel’s request for a new trial.

VLSI is represented by Irell & Manella LLP, Mann | Tindel | Thompson, and Haley & Olson PC. Intel is represented by Wilmer Cutler Pickering Hale and Dorr LLP, Kelly Hart & Hallman LLP, and Gillam & Smith LLP.

The case is VLSI Technology v. Intel Corp., W.D. Tex., No. 21-CV-00057, order posted 8/11/21.