Marvell fails to slice damages in Carnegie case
Chip maker Marvell Technology has failed to persuade a US judge to reduce the $1.17 billion fine it must pay a university for patent infringement.
In December 2012 a jury ordered Marvell to compensate Carnegie Mellon University, based in Pittsburgh, for infringing two patents that help to detect data stored on hard disk drives.
The $1.17 billion damages award was one of the largest fines in US patent litigation history.
Carnegie had sued Marvell in 2009 at the US District Court for the Western District of Pennsylvania, but was aware of the infringement as early 2004.
In the latest development, Marvell asked the judge to slice $620 million from the total fine. The figure was based on the damages Marvell faces for infringing one (‘180) of the patents between 2004 and 2009, before the suit was filed. Using a laches defence, Marvell said that because Carnegie waited five years before filing suit, it should be barred from claiming damages between 2004 and 2009.
Judge Nora Barry Fischer said the five-year delay was “unreasonable and inexcusable”, but that Marvell did know about the potential infringement in 2003 and should have avoided using the technology, or signed a licensing deal with the university.
The judge has already prevented Carnegie from claiming pre-suit damages based on the second (‘839) patent, because it did not ask its licensees to mark their products with the patent’s information, a requirement for recovering pre-suit damages.
Carnegie has asked Fischer to triple the $1.17 billion fine because the jury found that Marvell’s infringement was wilful. The award was based on royalties of $0.50 for every chip sold by Marvell, but Carnegie has asked the judge to raise that rate to $1.50 per chip.
The judge is yet to decide whether the damages should be tripled.
Whether Fischer triples the fine will depend on “the discretion of the court”, said Jeanne Gills, partner at Foley & Lardner. The judge might assess how close she came to invalidating the patents, Gills explained, as well as how reasonable the attorneys’ conduct was during the trial.
“If the invalidity issues were close, that could impact whether she increases the damages or by how much,” Gills said.
While the judge may not triple the damages, Gills continued, because the jury found for wilful infringement the fine may be raised.
An enhancement could see the largest ever fine handed down in US patent litigation history. According to Lex Machina, which compiles IP litigation data, the largest such fine to date is $1.67 billion, from a case between Centocor Ortho Biotech and Abbot Laboratories in 2009. That ruling was later set aside, however.
The dispute between Carnegie and Marvell may encourage patentees to “move a little quicker” between suspecting infringement and taking legal action, Gills said.
“The plaintiff’s attorneys are seeking fees for their pre-suit investigation, which took about seven or eight months, so in a case of this magnitude a pre-suit investigation is going to take some time, to make sure you have a legitimate case.
“But here where it is more than six years, you shouldn’t be pushing very close up to that limit ... You take a risk sitting on your hands,” she said.
Once due diligence is completed, said Gills, “you have to pull the trigger”.
The judge is expected to make a final call on damages in the next two to three months.
