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Intel Ordered to Pay $2.18 Billion in Chip Patent Case

Intel sold nearly a billion processors that infringe two patents, a judge rules. The jury assessed the chip giant $2.18 billion for damages.

A federal judge in Texas ordered Intel  (INTC) - Get Intel Corporation Report to pay $2.18 billion after a jury found the company had infringed patents related to chip-making.

Shares of the Santa Clara, Calif. company at last check were down 1.7% to $61.82.

The judge in the case ruled that Intel had infringed two patents owned by closely held VLSI Technology, Bloomberg reported.

The jury decided $1.5 billion for infringement of one patent and $675 million for infringement of the second. 

Intel, Santa Clara, Calif., the world's largest chipmaker, denied infringing either of the patents and said one was invalid because it claimed to cover work done by Intel engineers.

Intel did not immediately respond to a request for comment.

VLSI attorney Morgan Chu told jurors that the amount of damages extends into the billions of dollars based on the number of Intel's allegedly infringing products that use the patented technology, according to Law360.

"Intel has sold nearly a billion processors that infringe these two patents — that's uncontradicted," Chu said.

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Chu said the patents cover inventions that increase the power and speed of processors, a key issue for competition.

Intel attorney Joseph Mueller suggested that no licensing agreements anywhere are comparable to what VLSI is demanding in damages, and that one of VLSI's own expert witnesses conceded as much.

"It just doesn't exist. No one has ever paid anything remotely like the type of money VLSI is seeking for these two patents in the real world. … It's an outrageous demand, and really it tells you a lot about the character of the case," Mueller said.

Intel had sought to postpone the case because of the pandemic but was rejected by U.S. District Judge Alan Albright, a former patent litigator and magistrate.

Since Albright was sworn in as a federal judge in 2018, Texas Lawyer reported, patent holders have flocked to file their cases in the Waco Division of the Western District of Texas.

Albright has seen his docket more than triple from 2019 to 2020; 793 patent infringement cases were filed in Waco in 2020, 248 in 2019, and 28 in 2018, giving Albright the lion’s share of 2020’s patent cases. 

The trial is among the few in-person patent trials in recent months, with many courts pressing pause amid the coronavirus pandemic. 

It was delayed a week because of the winter storm that wreaked havoc across much of Texas.