Intel loses chip patent lawsuit, ordered to pay $949 million

Intel loses chip patent lawsuit, ordered to pay $949 million

The US tech giant will have to pay VLSI Technology $948.8 million for patent infringement.

Reuters reported that a federal jury in Texas on Tuesday said Intel must pay VLSI Technology $948.8 million for infringing on the company’s patent for computer chips.

VLSI used to be a standalone US-based chip design firm. Now, it’s a company without products or revenues, mainly used for the patents it holds. The company made microprocessors in the 80s and 90s. After being bought by a series of companies, it was eventually acquired by Ericsson.

The company’s design operations are now part of the Ericsson spin-off NXP Semiconductors. The VLSI patent portfolio is indirectly owned by Fortress Investment Group. Fortress, in turn, is backed by US private equity company SoftBank Group.

The lifespan of a patent

VLSI’s main charge against Intel was that its Cascade Lake and Skylake microprocessors violated a VLSI patent covering improvements to data processing.

During the six-day trial, a lawyer for Intel said that the company’s engineers developed innovations independently, and that its modern microprocessors would not work with VLSI’s “outdated technology”.

An Intel spokesperson said the company “strongly disagrees” with the verdict and plans to appeal, adding that the case is “one example of many that shows the US patent system is in urgent need of reform”.

VLSI’s law firm declined to comment on the verdict, according to Reuters. In 2021, VLSI won a $2.2 billion verdict from Intel in a separate Texas trial over different chip patents, which Intel has appealed. VLSI lost another related patent trial against Intel the following month.