Intel fined $2.2 billion by Texas jury for infringing chip design patents

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Chipmaker Intel Corporation has been fined $2.2 billion by a federal jury in Texas for infringing patents held by Dutch semiconductor company VLSI Technology LLC, a subsidiary of Fortress Investment Group. The prize covers two patents held by VLSI, with Dutch semiconductor company NXP Semiconductor also set to get part of the prize due to its ownership, and the prizes are split into $1.5 billion and $675 million for each. patents.

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Both patents were transferred to VLSI in 2019, before which they belonged to NXP. which had acquired them as part of its purchase of Freescale Semiconductor in 2015. One of them, 7,523,373, allows a processor to enter a low-power state called “sleep” when it is not not used using two voltage regulators one of which reduces power consumption and the second allows sufficient power to maintain the memory of the chip in an active state.

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The second, 7,725,759, allows the chip to quickly switch between programs, which allows it to significantly increase processing speed. The verdict in the case is important according to VLSI because other companies that have licensed its technologies have been watching the case and will make their payment decisions based on its outcome.

As part of their arguments, Intel’s attorneys argued that the patents cover technology that hasn’t been used for ten years and that the maximum damages VLSI was entitled to was $2.2 million. . The hearing of this case became the first in history to be virtually accessible to anyone in the world, as Judge Albright conducted the first in-person patent trial hearing since November.

VLSI had claimed in court that Intel had been using the technologies since at least 2008 – a claim which Intel denied by stating that it had never used the voltage regulator patent and that its own engineering work had invalidated the program switching patent.

Jury Prize for both patents.

In the context of the judgment, the bulk of the damages related to the power optimization patent representing more than half of the amount.

Intel plans to appeal the ruling, and the company’s shares fell 2.6% in trading after the verdict was announced. In premarket trading today, the chipmaker’s stock price is flat and the downtrend it posted late yesterday has not continued.

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The award is one of the largest in patent infringement history, and Intel and VLSI have also faced off in court before.

However, Intel’s fine could have been higher had the jury determined that the violation was willful. The verdict was against the company because of federal law which considers that knowledge of a patent is not the sole criterion for determining infringement; in other words, companies can unknowingly use technologies patented by others and still be accused of infringement.

With its new chief Pat Gelsinger taken over last month, Intel is aiming to resolve its manufacturing issues. Mr. Gelsigner has years of industry experience and his return to the company where he helped engineer some of Intel’s biggest hits is seen by many as the change the Santa Clara chip giant had need.

Intel, which has led the race in semiconductor manufacturing for years, is facing heat from Taiwan’s Taiwan Semiconductor Manufacturing Company (TSMC) in mass production of chips made on state-of-the-art process nodes. The requirement for extreme ultraviolet (EUV) machines for this purpose has created problems at Intel, and Gelsinger is confident the company will be able to overcome these challenges.

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