• U.S. court overturns $2.18B patent verdict against Intel, orders new damages trial.
• Intel pleased, argues low value of VLSI’s patent.
• Ongoing dispute holds industry implications for semiconductor patent challenges.

In a significant development for the tech industry, a U.S. appeals court on Monday overturned a historic $2.18 billion patent-infringement award against Intel Corporation, marking a major shift in one of the largest verdicts in the history of U.S. patent law.

The U.S. Court of Appeals for the Federal Circuit reversed the 2021 jury verdict that found Intel guilty of infringing one of VLSI Technology’s patents. The court has sent the case back to Texas for a new trial to determine the damages related to the infringement of a second VLSI patent. VLSI, a patent holding company owned by investment funds managed by Fortress Investment Group, had initially secured the $2.18 billion award from a jury in Waco, Texas.

Notably, Abu Dhabi’s Mubadala Investment Co had agreed to acquire a majority share of Fortress from Softbank Group Corp earlier this year.

Intel, pleased with the ruling, stated that it will argue during the new damages trial that VLSI’s patent is “of little value.” The court ruled that there was insufficient evidence for the jury to conclude that Intel infringed one of the two patents, which accounted for $675 million of the original $2.18 billion verdict. While the appeals court affirmed Intel’s infringement of another VLSI patent, it cited issues with the damages analysis and called for a new trial to determine the appropriate award. The initial jury had granted VLSI $1.5 billion in damages for Intel’s infringement of the patent.

In response to the ruling, Intel’s stock saw a dip of more than 4% on Monday morning, impacting other major chipmakers as well.

This legal battle is just one chapter in the ongoing dispute between VLSI and Intel. VLSI has filed multiple lawsuits against Intel in various U.S. courts, accusing the tech giant of infringing several patents related to semiconductor technology.

Notably, Intel had previously defeated VLSI’s attempt to secure over $3 billion in damages in another Waco jury trial in 2021. A separate jury in Austin, Texas had awarded VLSI nearly $949 million in a third patent case last year. The companies had also agreed to dismiss a potential multi-billion-dollar case in Delaware, while another trial in Northern California is scheduled for 2024.

The outcome of this case has broader implications for the tech industry, shedding light on the complexities and challenges associated with patent disputes in the rapidly evolving semiconductor landscape.

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