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Intel Ordered to Pay $2.18 Billion After Losing Patent Trial

However, the company disputes the claims and plans to appeal against the court's decision.

Intel Ordered to Pay $2.18 Billion After Losing Patent Trial
Intel's headquarters in Silicon Valley maybefalse/iStock

Intel has been ordered to pay $2.18 billion after losing a lawsuit over patents dating back to the early 2010s, a Bloomberg report explains.

At the end of the trial, the jury ruled that Intel infringed patents related to clock frequencies and voltage owned by a company called VLSI LLC. 

Broadly speaking, the two patents cover inventions that increase the power and speed of processors.

"Intel strongly disagrees with today's jury verdict," the company told Bloomberg in a statement. "We intend to appeal and are confident that we will prevail."

In a separate statement, VLSI chief executive Michale Stolarski said "We are very pleased that the jury recognized the value of the innovations as reflected in the patents and are extremely happy with the jury verdict."

The two patents, dating back to 2010 and 2012, have changed hands several times over the years due to a number of acquisitions. They were originally awarded to FreeScale Semiconductor and SigmaTel, both of which were eventually acquired by NXP Semiconductors in 2015.

VLSI was a semiconductor company founded in 1979. It was purchased by Philips in 1999 for $1 billion, and parts of it survive within the Philips-owned NXP Semiconductors.

Separately, VLSI LLC started up again four years ago before regaining control of the two patents at the center of the Intel lawsuit.

Is 'Willful blindness' the same as willful infringement?

Intel lawyer William Lee argues that the company purposefully set out to attain the patents in order to start the lawsuit. Lee says the company has no products and no other source of revenue aside from the lawsuit.

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"VLSI took two patents off the shelf that hadn’t been used for 10 years and said, 'We’d like $2 billion,'" Lee told the jury. The "outrageous” demand by VLSI "would tax the true innovators," he continued.

It is important to note that Intel is disputing the amount of money they must pay, not the patent infringement itself. William Lee argued that VLSI was entitled to no more than $2.2 million.

The $2.8 billion Intel is ordered to pay is more than the sum it paid to acquire Israeli chipmaker Habana Labs in 2019.

The jury didn't find Intel guilty of willful infringement, though VLSI lawyer Morgan Chu accused Intel of "willful blindness," stating that the company purposely didn't look to see if it was using someone else's invention.

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