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A U.S. Court of Appeals decision to overturn a $2.18 billion judgment won by VLSI against Intel could have important case study implications for patent law and intellectual property litigation.
The Western District Court of Texas issued the original judgment. The Texas business and business law communities will carefully monitor how this case may change the legal landscape and affect future lawsuits.
Background on the Intel vs. VLSI Case
Intel Corporation is an American company that designs, manufactures, and markets computer technologies. VLSI Technology, Inc. began as an integrated circuit (IC) manufacturer. Currently, VLSI Technology LLC is primarily involved in patent holding and patent litigation. According to Reuters, today, VLSI’s majority owner is Abu Dhabi’s Mubadala Investment Co.
In 2021, VLSI sued Intel for patent infringement over semiconductor technology patents. The intellectual property involved in the case is related to two patents for technologies used in Intel microprocessors with “Lake” in the name. The court ruled in VLSI’s favor and ordered Intel to pay over $2 billion in damages. For one instance of infringement, the jury awarded $1.5 billion. For the other, the jury awarded $675 million.
In December 2023, Intel successfully appealed the judgments. A jury for the appeals court found insufficient evidence to support the $1.5 billion claim and overturned it. The jury found the $675 million judgment was faulty and ordered a new trial to determine an appropriate award.
Broader Implications of the Intel vs. VLSI Rulings
There could be important case study implications from the Intel vs. VLSI judgment and its appeal.
The Appeal Could Deter Future Foreign Challenges and Protect U.S. Patent Laws
Intellectual property litigation is a challenging and changing area of the law. More and more, foreign investors are using this type of litigation to mount claims against U.S. companies.
Because patent law is complex, the lower courts and their juries do not always understand the overarching implications a judgment can have on patent law and intellectual property law as a whole. There is a fear that foreign companies may exploit these legal inconsistencies to their advantage. Weakening patent protections could give competing foreign technology markets, like China, an upper hand.
The Intel vs. VLSI appeal decision overturns a bad ruling from the lower courts and affirms the strength of the U.S. patent system. In turn, this protects the American technology market.
The Ruling Could Prevent Frivolous Lawsuits
Overturning the initial Intel vs. VLSI judgment could deter foreign entities from filing future frivolous (and overinflated) lawsuits for patent infringement.
One of the issues with the lower court’s original determination was the amount awarded to VLSI. VLSI argued that the intellectual property used to create Intel’s semiconductors increased computing performance by 5.5 percent. The company stated that each percentage of increased performance amounted to an additional 0.764 percent increase in the consumer price of the end product.
The jury used these figures presented by VLSI to determine the judgment. However, in its appeal, Intel argued that the jury calculated the damages based on its product’s end functionality and not the actual value of the intellectual property, which would be much less.
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Sul Lee Law Firm is a Texas-based business law firm that provides services to businesses in Texas. We also represent international companies that want to do business in the state. We focus on a wide range of business law and can advise clients regarding intellectual property law, commercial real estate, employment law, franchise law, and more.
If you have questions about the Intel vs. VLSI case and how it may affect the future of intellectual property law, we can provide further insights. We can also assist with all of your business law needs. Contact us online or call today to learn more.