VLSI Technology, LLC v. Intel Corp. (W.D. Texas 2021)

By Michael Borella --

There is an undercurrent in patent law these days that litigation favors the defendant.  Rather than contending infringement of a few claims of one patent, plaintiffs are now advised to assert multiple claims across several patents.  After 35 U.S.C. § 101 challenges, IPR filings, and summary judgment motions, plaintiffs are lucky if they are left with a few claims of one patent to bring to trial.  Analogies have been made that patent portfolios are like Swiss cheese.

But every so often, a patentee wins big, giving the viability of patent assertion campaigns a much-needed shot in the arm.

To that point, patent holder VLSI has won a whopping $2.175 billion jury verdict in the Western District of Texas.  VLSI is the owner of U.S. Patent Nos. 7,523,373 and 7,725,759.  Claim 1 of the '373 patent involves determining the minimum operating voltage of a memory and storing this value in non-volatile memory.  Two voltage sources are provided, and the second is selected to operate the memory if the first is below the minimum value.  Claim 14 of the '759 patent involves a programmable clock controller that can receive a request from a first device coupled to a variable clock frequency bus.  The controller then changes the frequency of a high-speed clock that is used to control the clock frequency of a second device coupled to the bus as well as the bus itself.  Both patents purport to reduce the power consumption of chips.

The jury found that Intel literally infringed claims 1, 5, 6, 9, and 11 of the '373 patent, and infringed claims 14, 17, 18, and 24 of the '759 patent under the doctrine of equivalents.  The jury also found that this infringement was not willful and that Intel had failed to establish anticipation of '759 patent (the validity of the '373 patent was apparently not at issue).

All said, the jury found Intel on the hook for $1.5 billion due to its infringement of the '373 patent and $675 million for its infringement of the '759 patent.  The main justification for damages of this magnitude is that Intel has sold billions of devices infringing the patents.

VLSI is a non-practicing entity, which Intel attempted to use against it at trial.  These efforts fell on deaf ears, but along with the 10-figure sum is likely to drive the ongoing "patent troll" narrative.

This is the second largest patent infringement verdict ever, and it will be the largest if it holds.  A $2.5 billion award to Idenix Pharmaceuticals in 2016 was overturned on invalidity grounds.  Here, an Intel appeal is inevitable, so VLSI will not be counting its money any time soon.

Comments

[skeptical]

I would love to see sanctions against those who so obviously ploy the "Patent Tr011" narrative.

The protection of a property right - a negative right such as a patent - does not depend on EITHER the owner, nor any infringement liability aspect of any positive aspect of the patent holder practicing the patent.

Let's see at least treble damages here.

[hardreaders]

If so many claims are highly susceptible to being challenged as invalid and/or unpatentable, then, instead of suggesting an issue with litigation favoring one side, that would seem just as—if not more—consistent with the quality of the claims simply being lousy.

And the advice given in response to that phenomenon also would appear to be counterintuitive. If one is truly concerned that a large portion of the claims may have issues, then it seems a bit improper to recommend throwing the figurative kitchen sink of infringement contentions without doing the needed investigation beforehand to weed out the more problematic claims.

I of course get that asserting a vast array of claims has a nice in terrorem effect, but if one chooses to do that, then I'm not sure how it's ok to turn around and complain when a good chunk of those claims get deep sixed.

-hr

[Paul Cole]

I have long urged that those who draft patents should ensure compliance with the Viagra criterion: the claimed subject-matter should be strong enough not only to pass the patent office but also to stand up in court. Although put in hopefully humorous terms, this requirement is anything but trivial and requires caution both at the drafting stage and on initiation of litigation where careful selection of the claims to be asserted is desirable. If the broadest asserted claim fails, there is often something of an avalanche effect insofar as that the court may not take the other claims as seriously. It should be mentioned, by way of background, that in the UK, and if my recollection is correct also in Canada, the claims in the Viagra patent did not stand up in court.

[hardreaders]

Very well put by Paul Cole. I fully agree.

[skeptical]

All well and good, Mr. Cole.

But again, are you confusing "Best Practices" with an issue with how our US laws are being applied?

The answer to misapplication of law is NEVER "well, you need to write at a higher degree to withstand such misapplication."

Mouthing what amounts to platitudes of "Best Practice" (even as the words DO have value in a "Best Practices" mode) simply is NOT HELPFUL in addressing problems in the application of law.

This comes across as an abdication of our responsibilities as attorneys to fight errant applications of law.

[Paul Cole]

@ Skeptical

I fully understand your comments about the application of law.

But we do not know whether the situation might improve in 20 days, 20 weeks or 20 years. In the meantime we have to do our best in the situation in which we find ourselves. If we can draft our specifications with foresight to avoid misapplication of the law, for example by explaining clearly the new results achieved and how this is done and avoiding over-broad and speculative claims, that is merely normal prudence and professional care. If we look back to the State Street case some years ago, the real objection was not lack of eligibility but under 35 USC 112(f) functional elements in the claims unsupported by the essential structure in the description to support these elements, and ought to have been addressed during USPTO examination.

[skeptical]

Mr. Cole,

Yet again, you seem to confuse best practices with the actual issue at hand.

Verily, it is IMPOSSIBLE to set out a standard of your, "with foresight to avoid misapplication of the law."

If you CAN do that, you are in the wrong business.