Summary: Although remaining largely ineffective as a mere shell under Fortress Investment Group’s control, VLSI continues its attempt to claim billions from Intel. A recent jury trial has favored Intel, a ruling that could significantly disrupt Fortress’s monetization plans.
Following a three-day jury trial, the U.S. District Court for the Western District of Texas determined that both VLSI Technology LLC and Finjan Inc. are under the oversight of Fortress Investment Group. Intel had previously established a licensing agreement with Finjan, and the jury concurred with Intel’s assertion that this agreement also pertains to VLSI’s patents considered to have been utilized by the company historically.
This recent verdict could significantly influence the ongoing legal confrontation between Intel and VLSI. Earlier, Fortress argued that Intel infringed a patent VLSI obtained from NXP Semiconductors NV. This technology was claimed to assist in chip design, though Intel maintained it was not integrated into any of its CPUs.
In 2022, a jury in Texas mandated that Intel pay close to $1 billion for the alleged infringement. Since then, Intel has requested a review of the case, claiming that its 2012 agreement with Finjan encompasses the patent at stake, given that both companies are under Fortress’s “common control.”
During the recent trial, Intel’s legal team successfully argued that Fortress Investment Group manages both VLSI and Finjan. Majority of the board members from both companies are Fortress employees. VLSI’s attorneys contended that these individuals prioritize investor interests, not the interests of Fortress itself.
With the district court’s decision siding with Intel, Fortress might need to reassess or even abandon its strategy to compel billions from the chipmaker. VLSI had previously secured a similar ruling against Intel, resulting in a substantial $2.2 billion in damages. This latest verdict could potentially overturn the combined $3 billion in patent infringement awards.
Fortress assumed control of VLSI and INVT SPE LLC via its investment funds, obtaining a collection of potentially valuable technology patents. Subsequently, it has filed numerous patent infringement lawsuits against Intel, Apple, HTC, among others.
Critics claim that Fortress and VLSI operate as patent trolls, capitalizing on litigation rather than fostering innovation. The recent ruling in favor of Intel indicates that this monetization strategy may be on the brink of failure.