Intel Cites VLSI's 'Enormous Verdict' As Reason To Delay Trial

By Dave Simpson
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Law360 (March 5, 2021, 10:53 PM EST) -- Three days after a jury in Waco, Texas, said Intel should pay over $2 billion for infringing VLSI's chip patents, Intel Corp. urged U.S. District Judge Alan Albright not to move the next trial in the case over different patents to Waco, citing the pandemic and the possibility of the first verdict tainting the jury.

As with the first trial, the second trial is set to take place in the Western District of Texas' Austin courthouse, which is closed due to the COVID-19 pandemic, but VLSI Technology LLC has asked the court to move the trial to the Waco courthouse, which is open.

Intel argued Friday that VLSI is just trying to rush the trial and that Judge Albright should wait until the Austin court reopens, which the chipmaker said should be soon thanks to the increase in vaccine output. Further, it pointed to the recent eye-popping jury verdict, one of the largest patent infringement verdicts in history.

"Trying a patent case in Waco in April — just a little over a month after the enormous verdict in the first case — would be especially prejudicial to Intel," the company said. "Due to the publicity in Waco surrounding the first trial and verdict, Intel is unlikely to get a fair trial in Waco so soon after the first verdict."

The $2.175 billion verdict arrived March 2, the day after closing arguments wrapped, with the jury finding that Intel infringed all of the contested claims in both patents. Intel is on the hook for $1.5 billion for literal infringement of U.S. Patent No. 7,523,373 and $675 million for infringing U.S. Patent No. 7,725,759 under the doctrine of equivalents.

The jurors decided that Intel's infringement was not willful. Had they found that it was, Judge Albright could have tripled the $2.175 billion damages award.

After the jury delivered its verdict, Judge Albright commended the attorneys for their professional conduct, saying every time he interacted with one of them, he was thankful former President Donald Trump appointed him to the federal bench in 2018. Since then, he's built his docket into the busiest patent docket in the country. He called himself "the luckiest person on the planet" to get to work with attorneys whose skill he said far exceeded his own as a trial lawyer.

"The lawyering in this case was truly exceptional, and I appreciate it," Judge Albright said.

During closing arguments, VLSI told the jury that evidence of infringement was crystal clear in nearly 1 billion Intel products, while Intel argued that VLSI failed to prove the patents are being used in any of its products. The arguments came after a nearly full day of witness testimony on damages and Intel's defense that the asserted patents are invalid, closing a six-day trial that was delayed by a week due to a winter storm.

The dispute between Intel and VLSI, which is owned by investment funds with assets managed by Fortress Investment Group LLC, is just one part of a sprawling battle between the companies. VLSI has asserted at least 21 patents against Intel in various venues throughout the country, which Intel has said is part of an anti-competitive patent aggregation scheme Fortress is backing.

The trial that is the subject of Friday's motion is scheduled for April 12. Another trial is scheduled for June.

VLSI is represented by J. Mark Mann, G. Blake Thompson and Andy Tindel of Mann Tindel Thompson, Craig D. Cherry of Haley & Olson PC, and Morgan Chu, Benjamin W. Hattenbach, Keith Orso, Christopher Abernethy, Amy E. Proctor, Dominik Slusarczyk, Charlotte J. Wen, Brian Weissenberg, Jordan Nafekh, Michael H. Strub Jr. and Babak Redjaian of Irell & Manella LLP.

Intel is represented by William F. Lee, Louis W. Tompros, Kate Saxton, Gregory H. Lantier and Amanda L. Major of WilmerHale, J. Stephen Ravel of Kelly Hart & Hallman LLP, and James E. Wren of Baylor Law School.

The case is VLSI Technology LLC v. Intel Corp., case number 1:19-cv-00977, in the U.S. District Court for the Western District of Texas.

--Additional reporting by Ryan Davis. Editing by Breda Lund.

Correction: An earlier version of this story incorrectly described the relationship between VLSI and Fortress. The error has been fixed.

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