Intel scores key jury ruling in $3 billion patent duel with VLSI — ruling threatens prior patent verdicts

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Intel scores key jury ruling in $3 billion patent duel with VLSI — ruling threatens prior patent verdicts

This week, Intel convinced a Texas jury that Fortress Investment Group controls VLSI technology, a major development that could overturn Intel’s over $3 billion in patent infringement payments to VLSI. Intel asserts that since Fortress also controls Finjan, with which Intel has a patent license agreement inked in 2012, this agreement should also extend to VLSI, a company that alleged Intel of patent infringements, reports

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VLSI had earlier filed multiple lawsuits against Intel across various U.S. courts and other jurisdictions, claiming infringement of 19 patents originating from Freescale, SigmaTel, and NXP. In one major case held in Waco, Texas, in 2021, a jury awarded VLSI $2.18 billion, but that verdict was later overturned by an appeals court and sent back for new proceedings. Another jury trial in Austin in 2022 resulted in a $949 million award to VLSI, a decision that Intel has continued to challenge based on the licensing issue.

Intel argues that it signed a patent licensing agreement with Finjan in 2012, which provided licenses for patents owned by Finjan and other companies under mutual control. Intel asserted that since Fortress oversees both Finjan and VLSI, the agreement should also shield it from VLSI’s patent claims. However, VLSI argued that the agreement did not bind it as it was not founded until four years after the license was signed.

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U.S. District Judge Alan Albright oversaw the most recent trial in Austin. The proceedings specifically examined the extent of Fortress’s control over both companies, which was critical in determining whether the prior license applied. While Intel pushed the argument of common control, VLSI maintained that it operated independently and outside the terms of the earlier license.

Now that the jury has concluded that Fortress owns both Finjan and VLSI, Intel can demand both of its awards back.

Intel and Apple had previously accused VLSI of unlawful patent accumulation aimed at getting patent licensing fees from actual CPU developers. Intel further claimed that VLSI’s complex ownership arrangement enables its investors to profit from the litigation while keeping their identities hidden from the court and the public. At the time, Fortress Investment Group was owned by SoftBank, also Arm’s parent company. By now, Abu Dhabi’s Mubadala Investment Company has acquired a majority stake in Fortress.

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