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Intel And VLSI Settle Patent Dispute Worth $4 Billion In Delaware

California and Texas are still engaged in two additional legal disputes.

This week, Intel and VLSI resolved one of their ongoing legal disputes. According to Reuters, the legal dispute in Delaware involved five patents, and damages over $4 billion were sought by VLSI. In the interim, the two companies have additional pending lawsuits in California and Texas.

The two parties agreed to a final settlement of their dispute in Delaware, so the case cannot be brought to court again. VLSI agreed not to sue Intel’s customers and suppliers regarding the five CPU patents at issue, while Intel agreed to drop its counterclaims. The two businesses will not make any payments to one another.

A court filing states, “The parties have agreed to dismiss all claims and counterclaims in this action.”

Intel and VLSI are engaged in a protracted legal battle in courts across the United States and internationally. VLSI asserts that Intel has violated 19 patents owned by Freescale, SigmaTel, and NXP. Several of the allegations have been dismissed by juries, but the majority of the cases are ongoing.

The Delaware case involving five CPU patents was potentially the most lucrative for VLSI, which sought $4 billion in damages. Nonetheless, the parties chose to dismiss it. In March 2021, a district judge in Waco, Texas, ordered Intel to pay VLSI $2.18 billion for infringing on two of VLSI’s patents relating to frequency management and memory voltage reduction. In August of 2021, Intel failed to overturn the ruling. In November of this year, a federal jury in Texas ordered Intel to pay VLSI nearly $949 million for infringing VLSI’s patent 7,242,552, which covers a method for reducing bond pad defects caused by stress.

Intel and Apple have accused VLSI of illegally aggregating patents. The chip giant also claims that VLSI’s complex ownership structure enabled its investors to profit from the lawsuit while hiding their identities from the court and the public. Meanwhile, Fortress Investment Group, a private equity firm owned by SoftBank, controls VLSI. SoftBank owns Arm as well.

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