Intel Hit With $948 Million Verdict in VLSI Patent Trial

Intel Corp. owes VLSI Technology LLC $948 million after jurors in Austin, Texas, said the chip-maker infringed on a VLSI patent designed to improve computer processor performance—the latest chapter in their sprawling intellectual property feud.

It was the third trial between VLSI and Intel over different patents related to chip-making technology. VLSI won a $2.18 billion verdict in Waco, Texas, in March 2021. Intel was cleared of infringement in a trial the following month.

Judge Alan D. Albright of the US District Court for the Western District of Texas presided over all three trials, with the latest held in Austin, which he decided was a more convenient venue.

In closing arguments on Tuesday, VLSI’s attorney Morgan Chu of Irell & Manella LLP said that Intel infringed US Patent No. 7,606,983, which covers an invention that helps keep information flowing through computer processors.

VLSI’s patent “improved performance” by putting computer processor traffic “on the equivalent of the fast lane,” Chu said. “There are millions and millions of infringements per second in the Intel chips.”

A lawyer for Intel, Bill Lee of Wilmer Cutler Pickering Hale and Dorr LLP, countered that the technology described in the patent isn’t used in modern microprocessors.

He also said “there’s not a shred of evidence” Intel’s engineers copied the ‘983 patent. Lee said “they want you to think Intel’s engineers just stumbled into infringing the patent,” but their testimony “documents that their products operate differently.”

Additionally, Lee argued that the ‘983 patent isn’t valid because the same technology was covered by an earlier patent that was not considered by the patent examiner.

After 4 1/2 hours of deliberations, the jury of three women and four men announced their verdict.

The latest verdict comes amid active patent litigation between Intel and VLSI in federal courts in California and Delaware, as well as in Shanghai and Shenzhen in China. The US Court of Appeals for the Federal Circuit on Tuesday revived portions of another VLSI patent that had been wiped out by the Patent Trial and Appeal Board.

Administrative reviews of patents underlying a prior Intel-VLSI verdict remain ongoing, with one recently triggering sanctions and a second look from the US Patent and Trademark Office’s director following her initial remand.

VLSI was created by Softbank Group Corp.-owned Fortress Investment Group., which has been accused of hoarding patents and making aggressive licensing demands. The patent in the case once belonged to Dutch chipmaker NXP Semiconductors Inc. but was sold to VLSI in 2018 with 17 other patents for $3 million, according to a slide Intel’s lawyers showed the jury Monday.

Intel has also sued Fortress and other patent holders for antitrust violations in California.

Neither Intel nor VLSI immediately responded to requests for comment.

Mann Tindel Thompson and Haley & Olson PC also represent VLSI. Kelly Hart & Hallman LLP, Gillam & Smith LLP, and Morrison & Foerster LLP also represent Intel.

The case is VLSI Technology LLC v. Intel Corp., W.D. Tex., No. 19-cv-977, 11/15/22.