Intel Wins Appeal on VLSI Case, $2.18B Judgement Reversed

A U.S. appeals court on Monday overturned a 2021 patent infringement ruling against Intel that awarded patent holding company VLSI $2.18 billion over multiple patent violations. In a two-part decision, the court reversed a previous verdict that found that Intel violated a frequency management patent, while affirming the violation of a second patent on memory voltage reduction – but sending it back to a lower court on the grounds that the damages were improperly calculated in the original trial, Reuters reports.

Back in 2021, a District Judge in Waco, Texas, awarded VLSI a $2.18 billion patent infringement compensation by Intel. This amount included $1.5 billion for infringing on a patent related to frequency management developed by SigmaTel ('759'), and $675 million for a patent on reducing memory voltage, originally from Freescale ('373'). Intel challenged this ruling, but the attempt was unsuccessful in August 2021. Consequently, Intel sought the Patent Trial and Appeal Board's (PTAB) intervention to invalidate both patents, which PTAB did earlier this year.

The PTAB's rulings vacated Intel from the obligation to compensate VLSI for the alleged infringement of its '759' and '373' patents. Meanwhile, VLSI exercised its right to contest the PTAB's decisions, bringing the case to the U.S. Court of Appeals for the Federal Circuit. This court concluded that Intel did indeed infringe upon the '373' patent, but it set up another trial as it believed that the initial trial improperly calculated damages.

Intel said that the remaining patent has little value, though it remains to be seen whether the new trial will award VLSI a different sum and whether Intel will appeal once again.

Intel and VLSI are engaged in extensive legal disputes across various states and internationally, involving several allegations of Intel infringing on VLSI's patents. These patents were initially developed by Freescale, SigmaTel, and NXP, but were eventually sold to VLSI to be part of its larger portfolio. While some of these allegations have been dismissed by courts and others withdrawn by VLSI, numerous cases remain active.

Fortress Investment Group, a private equity firm that had control over VLSI, is under the ownership of SoftBank. SoftBank also holds a significant control over Arm, a competitor of Intel in the CPU market. Intel and Apple have leveled accusations against VLSI, Fortress, and related entities, claiming they engage in illegal patent collection practices. Meanwhile, back in May, Mubadala Investment agreed to purchase the majority of Fortress from SoftBank.