Chip Maker Marvell Must Pay $1.17 in Patent Lawsuit

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Semi-conductor manufacturer Marvell Technology has lost a patent lawsuit brought by Carnegie Mellon University. The jury has ordered Marvell to pay $1.17 billion, but the judge could triple that award because the jury found that the patent infringement was willful.

The Wall Street Journal’s Don Clark reported, “A federal jury in Pittsburgh found Wednesday that chip-maker Marvell Technology Group Ltd. should pay nearly $1.17 billion for infringing patents held by Carnegie Mellon University. The award ranks as the third largest ever in a patent case, according to Lex Machina Inc., a firm that provides data and analytic services used in intellectual-property litigation.”

Ars Technica’s Joe Mullin explained, “The two CMU patents describe a way of reducing ‘noise’ when reading information off hard disks. The jury found that Marvell’s chips infringed claim 4 of Patent No. 6,201,839 and claim 2 of Patent No. 6,438,180. At trial, Marvell hotly contested that CMU had invented anything new; they argued that a Seagate patent, filed 14 months earlier, describes everything in CMU’s invention.”

Mullin also noted, “If the verdict holds up on appeal, it would wipe out more than a year of profits at Marvell, which made a bit over $900 million in 2011.”

Patrick Seitz with Investor’s Business Daily added, “Chipmaker Marvell Technology Group (MRVL) said Thursday it will seek to overturn a federal jury verdict that found it willfully violated patents held by Carnegie Mellon University in Pittsburgh. In a statement, the Santa Clara, Calif.-based company said ‘the evidence and the law do not support the jury’s findings of infringement, validity and the award of damages.’ The jury ordered Marvell to pay the university $1.17 billion in damages, which the judge could triple because the infringement was declared willful.”

Troy Wolverton with the San Jose Mercury News observed, “Shares of Marvell Technology plunged Wednesday after the company was hit with a $1.17 billion verdict in a patent case…. Marvell’s stock closed regular trading down 85 cents, or 10 percent, to $7.40. Its shares were off another 21 cents, or 2.8 percent, in after-hours trading.“