VLSI, Intel Face Off In 1st In-Person Patent Jury Trial Of 2021

By Katie Buehler
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Law360 (February 22, 2021, 10:20 PM EST) -- Western District of Texas Judge Alan D. Albright on Monday initiated the nation's first in-person patent jury trial held since November, in a dispute in which VLSI Technology LLC claims Intel Corp. owes it billions of dollars for infringing two computer chip patents.

Before beginning his opening statement, VLSI attorney Morgan Chu of Irell & Manella LLP thanked the jurors for providing their service to the justice system in spite of Winter Storm Uri, which hit Texas on Feb. 14 and caused millions in the state to be left without power and water for days during a record-setting cold snap. The winter storm postponed the trial by one week.

"You stuck it out to be of service as citizens to be a part of our justice system," Chu said. "I'm sure the court feels strongly about it, and the VLSI team feels strongly about it."

VLSI, which sued Intel in April 2019, claims the tech giant has sold billions of computer chips since at least 2008 that lifted patented energy-saving and speed-optimizing technology. Intel, meanwhile, contends it owes VLSI nothing, because it has never used the energy-saving patented technology and prior art invalidates the speed-optimizing patent.  

Chu emphasized the importance of this case, telling jurors that several other big-name companies VLSI licenses its patents to have opted to withhold royalty payments and "wait and see" how the trial plays out. He told jurors VLSI is seeking damages of a reasonable royalty rate against Intel.

The patents-in-suit deal with microprocessor programming, Chu explained. U.S. Patent No. 7,523,373 allows a chip to sleep when not in use by employing two voltage regulators. One regulator will "ramp down" the microprocessor when it is not needed to load graphics or other energy-intensive tasks while the second regulator remains on to power the microprocessor's memory.

U.S. Patent No. 7,725,759 focuses on increasing the microprocessor's speed by allowing the chip to switch from one program to another at a rate 300 times faster than usual.

Chu said Intel will attempt to argue VLSI's patents aren't valuable, but that the company's actions tell a different story.

"If inventions aren't valuable, engineering companies will invent around it or expand on it," Chu said. Instead, Intel allegedly replicated the patented technology over and over again as new families of its computer chips were produced.

"Intel, by its conduct, shows the value of these inventions," he added.

Intel's attorney William Lee of WilmerHale argued the patents-in-suit are so valueless that no one, not even VLSI, uses the '373 patent. He said the accused Intel technology was independently developed and is different than the technology described in that patent.

On the other hand, the '759 patent is invalid because Intel allegedly developed similar technology a decade before the VLSI patent, which was approved and published in 2007, was even filed. Lee told the jurors the only reason the '759 was approved by the U.S. Patent and Trademark Office was because no evidence of prior art was submitted with the patent application.

"The patent office never knew that," Lee said. "If it had, it would have never been approved."

When the jury was first empaneled, Judge Albright warned the jurors that some of the evidence and testimony presented during trial will look different because of the COVID-19 pandemic. Some testimony will be presented via videotape, he said, and he urged the jury to not hold the quality of the video or the video's setting against the witness.

In addition to changes in witness presentation, Judge Albright, who held his first-ever patent jury trial in October, has also implemented heightened COVID-19 safety protocols for this trial. In a 13-page order released Feb. 10, the judge stated trial participants would have to wear masks, abide by social distancing rules and, most notably, take daily COVID-19 tests before entering the courthouse.

The testing, the order stated, will be administered by nurses at a location within walking distance of the courthouse and results will be available in 15 minutes. Anyone who tests positive can opt to be retested to rule out a false positive.

If anyone tests positive, the nurses will communicate that fact to the parties without identifying the individual, and the court will hold a conference to determine the next steps, the order states.

The patents-in-suit are U.S. Patent Nos. 7,523,373 and 7,725,759.

VLSI is represented by Morgan Chu, Benjamin Hattenbach, Amy Proctor, Dominik Slusarczyk, Charlotte Wen, Brian Weissenberg, Benjamin Manzin-Monnin, Jordan Nafekh, Michael Strub Jr. and Babak Redjaian of Irell & Manella LLP, Craig Cherry of Haley & Olson PC and Andy Tindel, J. Mark Mann and G. Black Thompson of Mann Tindel Thompson.

Intel is represented by William Lee, Louis Tompros, Kate Sazton, Gregory Lantier and Amanda Major of WilmerHale, J. Stephen Ravel and Kelly Ransom of Kelly Hart & Hallman LLC and James Wren of Baylor Law School.

The case is VLSI Technology LLC v. Intel Corp., case number 6:21-cv-00057, in the U.S. District Court for the Western District of Texas.

--Additional reporting by Cara Bayles, Ryan Davis and Tiffany Hu. Editing by Bruce Goldman.

For a reprint of this article, please contact reprints@law360.com.

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