VLSI Urges Federal Circuit to Block Intel Patent-License Trial

VLSI Technology LLC petitioned the Federal Circuit to block a March trial in California over whether Intel Corp. was entitled to use patents that underpin a pair of jury verdicts holding Intel liable for more than $3 billion.

VLSI said the US District Court for the Northern District of California’s upcoming trial over whether Intel has a license to use VLSI’s patents would be “unprecedented” and beyond its jurisdiction, according to its Thursday petition. Several of VLSI’s patent infringement allegations were adjudicated in Intel’s favor and the others were dropped, and as a result the court in January said Intel’s defense was moot, VLSI noted.

Judge Beth Labson Freeman ultimately allowed Intel to “rebrand its affirmative defense as a counterclaim,” according to VLSI, setting a March 25 trial date for the license issue.

VLSI said if any judge has jurisdiction to rule on the California semiconductor giant’s defense it’s Judge Alan D. Albright, who presided over the Texas federal trials between the two companies that resulted in $2.2 billion and $948 million verdicts that are still being litigated.

The filing is the latest high-stakes maneuver in a long-running patent dispute between Intel and VLSI over a handful of semiconductor patents obtained from Dutch manufacturer NXP Semiconductors NV.

Rather than “accept victory” in the Northern California case, Intel has insisted “that the district court proceed to trial only on its affirmative defense” that it is entitled to use VLSI patents due to a previous license it held with non-parties Finjan Software Inc. and Finjan Inc., VLSI wrote in its mandamus petition to the US Court of Appeals for the Federal Circuit.

The appellate court, which has exclusive jurisdiction over patent appeals, said in a December opinion that Albright erred when he barred Intel from arguing the license defense in that case. The appeals court also significantly cut back VLSI’s damages from the $2.2 billion verdict and sent the case back to Texas for further proceedings.

Intel initially raised the license issue in 2020, after Fortress Investment Group LLC—which formed and owns VLSI—allegedly acquired control of Finjan through funds it manages while VLSI’s suits against Intel were still pending trial. Intel has argued a 2012 license agreement between Finjan and Intel gives it the right to use patents owned not just by Finjan itself but also by that company’s “affiliates,” which after the Fortress acquisition include VLSI.

If Intel were to secure a ruling that its Finjan license covers the VLSI patents, that would imperil both of the Texas verdicts.

Irell & Manella represents VLSI. Intel is represented by Wilmer Cutler Pickering Hale and Dorr LLP.

The case is In re: VLSI Tech. LLC, Fed. Cir., 24-116, mandamus petition 2/15/24.