AUSTIN, Texas — Intel has persuaded a jury that Fortress Investment Group controls VLSI Technology, a ruling that could significantly impact Intel’s financial obligations linked to allegations of patent infringement by VLSI. This decision could potentially reverse Intel’s previous payments exceeding $3 billion to VLSI related to these patent disputes.
The heart of the contention lies in a licensing agreement Intel established with Finjan in 2012, which Intel claims should also extend to VLSI due to Fortress’s control over both entities. Intel argues that the agreement, which covers patents held by Finjan and other associated firms, provides coverage against VLSI’s infringement allegations. However, VLSI counters that it was founded four years after the agreement was executed, asserting that the agreement does not apply to its operations.
VLSI has been active in pursuing legal action against Intel, with multiple lawsuits filed in various U.S. courts. One notable case in Waco, Texas, ended in a jury awarding VLSI $2.18 billion in 2021. This ruling was later overturned by an appeals court and sent back for retrial, putting the matter back in the legal spotlight. A subsequent jury trial in Austin last year awarded VLSI nearly $949 million, a decision that Intel has continued to contest, emphasizing the licensing issue at the core of their argument.
U.S. District Judge Alan Albright presided over the recent Austin trial, during which the extent of Fortress’s influence over both Finjan and VLSI was scrutinized. This determination is pivotal for establishing whether Intel’s prior license agreement has any bearing on the current claims being made by VLSI. Intel’s legal team stressed the concept of common control, while VLSI maintained its position of operational independence.
Following the jury’s conclusion confirming Fortress’s ownership of both entities, Intel now has the option to seek the return of previous awards granted to VLSI. In past statements, Intel and Apple have voiced concerns regarding VLSI’s approach to accumulating patents, suggesting it was a strategy designed to extract licensing fees from genuine CPU manufacturers. Intel has also pointed out that VLSI’s complex ownership structure serves to mask the identities of its investors, allowing them to profit from litigation without direct accountability.
Fortress Investment Group, which previously fell under the ownership of SoftBank, has since seen a majority acquisition by Abu Dhabi’s Mubadala Investment Company, further complicating the ownership landscape.
This evolving legal battle not only underscores the intricacies of patent law but also highlights the broader implications for the technology sector regarding patent ownership and licensing agreements. As the situation unfolds, it could lead to significant shifts in how companies navigate their intellectual property strategies.
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