Intel needs to pay billions after lost patent lawsuit

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Processor manufacturer Intel has been ordered to pay 2.18 billion dollars to VLSI Technologies because the company is said to have infringed two patents held by VLSI.

It is not clear which patents are at issue, other than that they concern technologies for making processors faster. For the two infringements, fees of 1.5 billion and 675 million dollars respectively must be paid, for a total of 1.8 billion euros equivalent.

VLSI not the original owner of the patents

VLSI Technology is a company without products or revenues. The company made microprocessors in the 80s and 90s, but after several takeovers, little is left of the company. The company now lives on as part of the Dutch company NXP Semiconductors, and according to an Intel lawyer, it is little more than a patent troll.

One of the patents in question originally came from Freescale Semiconductor. Sigmatel originally filed the other. However, Freescale acquired Sigmatel in 2010. In 2015, the Dutch company NXP Semiconductors acquired Freescale and thus got hold of both patents. NXP later transferred the patents to VLSI. NXP is entitled to a portion of the fees Intel has to pay.

Disproportionate

Intel considers the payment disproportionate. Lawyers for the company claim that VLSI “took two patents off the shelf that hadn’t been used for 10 years and said, ‘We’d like $2 billion,”. Payment of no more than 2.2 million dollars seemed more reasonable to the lawyers.

Intel claims that it did not know about the patents and therefore did not deliberately infringe them. In doing so, the company has managed to reduce the payment. Otherwise, the payment would possibly have been three or four times as high. Lawyers of VLSI, however, accuse Intel of “willful blindness”.

Case not over yet

With the payout, Intel has lost about half of its profits in the fourth quarter. However, market analyst Rob Enderle told SiliconANGLE that Intel is likely to make another attempt to convince the jury of its side of the story.

Tip: VMware CEO Pat Gelsinger replaces Bob Swan at Intel