US Appeals Court Vacates Record Patent Damages Against Intel in Landmark Ruling

 

The legal battle between chipmaker Intel Corporation and patent holding company VLSI has taken another turn as the US Court of Appeals for the Federal Circuit (CAFC) delivered a groundbreaking verdict. The CAFC decision, announced on December 4, 2023, overturned a $2.18 billion damages award against Intel for patent infringement, marking one of the largest patent disputes in recent memory.

At the crux of this legal saga lay allegations by VLSI that Intel violated two of its patents, triggering the initial jury verdict in favor of VLSI in March 2021. However, the recent CAFC ruling has reshaped the landscape of this case, affirming the infringement of one patent (the '373 patent) related to integrated circuit memory and processing. Simultaneously, the court reversed the jury's finding regarding the infringement of the second patent ('759), dealing a substantial blow to VLSI's claims.

The appeals court's decision hinged on critical legal grounds. It agreed with Intel's argument that VLSI's doctrine of equivalents theory, utilized to establish infringement, lacked legal sufficiency. Notably, this doctrine, invoked in patent infringement cases, becomes relevant when an accused product doesn't precisely infringe a patent invention but does so under the doctrine's equivalents. 

This pivotal ruling holds substantial implications for both parties involved. For Intel, it marks a significant reprieve from a colossal financial burden. The initial fine, poised at $2.18 billion, faced dismissal due to the appeals court's reevaluation of infringement claims. The recent appellate ruling overturning the staggering damages award against Intel stands as a testament to the intricacies and uncertainties of patent litigation. The reverberations of this decision are poised to have far-reaching consequences, reshaping the dynamics of intellectual property disputes in the technology sector.

For Intel: William F. Lee, Alison Burton, Lauren B. Fletcher, Joseph J. Mueller, Steven Jared Horn, Amanda L. Major, Benjamin N. Ernst and Mary V. Sooter of Wilmer Cutler Pickering Hale and Dorr.