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On December 4, 2023, the Court docket of Appeals for the Federal Circuit vacated a $2.18 billion harm award towards defendant Intel Company as a result of it discovered plaintiff VLSI Know-how LLC had erred on its damages calculation, that one of many asserted patents was not infringed, and that Intel was wrongly barred from elevating a protection that it had a newly acquired license to the asserted patents.
On April 11, 2019, VLSI sued Intel, alleging infringement of two patents. After a trial in March 2021, a jury discovered infringement of each patents and awarded separate damages for every. The decision was for $1.5 billion for literal infringement of 1 patent and $675 million for infringement below the doctrine of equivalents of a second patent.
The courtroom additionally dominated, after the trial, on a movement that Intel had filed within the fall of 2020, a couple of months earlier than trial, wherein Intel sought to amend its reply to claim a protection that it was licensed to apply each VLSI patents. The movement was based mostly on a latest change in possession of Finjan, Inc., which had a license settlement with Intel. Intel argued that the license now lined VLSI’s patents as a result of VLSI and Finjan have been now each below the management of Fortress Funding Group LLC. The district courtroom denied the movement.
On enchantment, the Federal Circuit affirmed the judgment of infringement on one of many asserted patents however reversed the judgment of infringement on the opposite patent. Particularly, the Federal Circuit discovered, based mostly on the proof introduced, that VLSI’s doctrine of equivalents idea failed as a matter of regulation, and due to this fact, the judgment of infringement was reversed on that patent.
As to damages, the Federal Circuit remanded the case for a brand new trial on the difficulty of damages. The Federal Circuit discovered VLSI’s skilled had used inputs that he selected by making an attempt to match information from using non-infringing performance, which undermines the reliability of the outcomes as a calculation of energy financial savings from using the infringing performance. And the Federal Circuit reasoned it couldn’t deem this step within the damages calculation innocent as to the bottom-line quantity of damages such that the error “couldn’t have modified the end result,” particularly, the exact quantity of damages.
However, the Federal Circuit additionally discovered no sound foundation, given the character of the error discovered or of the opposite errors alleged, for denying VLSI a chance to supply a corrected damages case, and located no sound foundation, within the error discovered or the opposite errors alleged, for setting apart the legal responsibility verdict as contaminated by the damages verdict. Thus, the Federal Circuit remained the case for a brand new trial on the difficulty of damages.
As to the license protection raised by Intel, the Federal Circuit discovered that the district courtroom’s conclusion that Intel unduly delayed submitting its movement—between the time of the July 24 acquisition and the submitting of the November 10 movement—was an abuse of discretion. Intel was required by the 2012 license settlement to comply with sure procedures, and the Federal Circuit discovered Intel acted with diligence in doing so. Particularly, on August 17, 2020, in accordance with the method necessities, Intel despatched a letter to Finjan, VLSI, and Fortress stating that Intel holds a license to VLSI’s patents below the 2012 Intel-Finjan license settlement and that Intel wish to start the dispute decision course of. Then, on September 2, 2020, Intel filed its movement to remain in gentle of the brand new license protection. When the district courtroom had not dominated by early November, Intel filed the movement now at challenge on November 10, 2020, stating that it moved to amend its reply “[t]o keep away from any doubt that Intel has preserved its protection of license on this case.” Thus, the Federal Circuit didn’t see any affordable foundation for a willpower of undue delay.
The Federal Circuit additionally doesn’t discover any foundation on which prejudice alone may assist the denial of the movement. Intel requested severance of the protection from the remainder of the case and a keep of its adjudication so a trial of the opposite points was to not be delayed.
Nonetheless, the Federal Circuit acknowledged that it was solely holding that it was an error to disclaim the movement so as to add the license protection to the case, which it mentioned “is a really slender holding.” The Federal Circuit made clear that it didn’t conclude that the license protection was meritorious. It solely discovered that the governing regulation is such that the protection requires extra litigation of the type that begins as soon as it’s added to the case, whether or not that course of is a totally developed movement to dismiss, with a fuller evaluation of the governing regulation than has but occurred, or extra fact-based litigation.
The Federal Circuit then remanded the case again to the district courtroom for additional proceedings in line with its opinion.
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