Intel may have to cope with losing nearly half of its fourth-quarter profit after losing a patent trial case in Texas. The chipmaker’s costly defeat was shared by Bloomberg Law earlier this week, which published a story confirming that Intel had been ordered to pay a remarkable $2.18 billion for allegedly infringing upon two patents held by VLSI Technology, Inc. that helped increase the power and speed of its processors. VLSI used to design and manufacture custom and semi-custom integrated circuits but no longer has any products.
“[VLSI] took two patents off the shelf that hadn’t been used for 10 years and said, ‘We’d like $2 billion,”’ William Lee, Intel’s lawyer, told the jury. Describing the demand by VLSI as an “outrageous” form of tax on the “true innovators,” Lee argued that the company was entitled to no more than $2.2 million.
“One of the patents was originally issued in 2012 to Freescale Semiconductor Inc. and the other in 2010 to SigmaTel Inc. Freescale bought SigmaTel and was in turn bought by NXP in 2015,” the publication clarified. “The two patents in this case were transferred to VLSI in 2019, according to data compiled by Bloomberg Law.”
Intel has provided a statement noting that it strongly disagrees with the jury verdict and intends to file an appeal, which it confidently intends to win. VLSI CEO Michael Stolarski, on the other hand, is ecstatic with the verdict and how the jury “recognized the value of the innovations as reflected in the patents.”
“The damage request isn’t so high when the billions of chips sold by Intel are taken into account,” said VLSI lawyer Morgan Chu. “Intel paid MicroUnity Systems Engineering Corp. $300 million 2005 and in 2011 paid Nvidia Corp. $1.5 billion even though a settlement in that case involved a cross license of technology.”