Lawyers for Marvell Semiconductor have a towering task ahead of them: trying to eviscerate, or at least tamp down, a punishing $1.53 billion patent verdict. Unless they are successful in their appeal, Marvell will have to pay the largest patent verdict ever upheld.
Seeking to preserve the huge payout is Carnegie Mellon University (CMU), which sued Marvell in 2009. Lawyers for CMU say the technology described in two CMU patents, which relate to chips that reduce “media noise” from hard disk drives, did nothing less than save Marvell’s business. The jury’s original verdict of $1.17 billion, later enhanced for willfulness and interest, is based on a royalty of 50¢ per chip. CMU says that’s a reasonable rate given the more than $5 billion in profit that Marvell earned on those chips.
A panel of three Federal Circuit judges heard oral arguments in the case earlier this week. In their appeal brief (PDF), Marvell lawyers attack CMU’s two patents, numbered 6,201,839 and 6,438,180, as market failures, “incapable of commercial implementation.” In 2005, the company offered to license one of the two patents to Intel as part of a larger group for $200,000, but Intel declined (and was not sued). Marvell, though, was slapped with a running royalty of 50¢ per chip on the more than two billion chips it sold worldwide over nearly a decade.
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