Intel Ordered To Pay US$2.18 Billion To Previously Inactive Company In Patent Lawsuit

A US court has ordered Intel to pay US$2.18 billion (~RM8.83 billion) to VLSI Technology for infringing two chip-related patents owned by the latter, Bloomberg said. In a strange twist, VLSI was previously inactive for 20 years from 1999, and then seemingly emerged again in 2019 just to sue Intel, The Verge noted.

Indeed, Intel lawyer William Lee told the court that VLSI didn’t have products and that the lawsuit was its only source of potential revenue. VLSI “took two patents off the shelf that hadn’t been used for 10 years and said, ‘We’d like $2 billion,’” Lee said, according to Bloomberg.

Lee called VLSI’s demand “outrageous” and argued that it didn’t deserve more than US$2.2 million (~RM8.9 million). The jury obviously disagreed, resulting in one of the largest patent-damages award in US history – equivalent to half of Intel’s fourth quarter profit.

Intel said it would appeal the court’s decision.

Here’s where it gets complicated. Electronics giant Philips bought VLSI in 1999. Later, VLSI assets find their way into NXP, a Philips spinoff company that makes chips.

A company named Freescale Semiconductor used to hold one of the patents in question, and SigmaTel the other. Freescale eventually acquired SigmaTel and then was itself acquired by NXP in 2015. Bloomberg Law said the two patents were transferred to VLSI in 2019.