Federal Circuit slashes $1.5bn Marvell damages for Carnegie infringement

The US Court of Appeals for the Federal Circuit has granted US chip maker Marvell Technology a partial victory by slashing the $1.54 billion in damages it owes Carnegie Mellon University for patent infringement.

The court cut the total to $278 million, which applies to Marvell’s US sales of infringing hard-disk drives, including those sold during litigation.

In a ruling handed down yesterday, August 4, the three-judge panel unanimously said that a new trial is needed to determine the damages owed specifically for the sale and manufacture of infringing hard-disk drives outside the US.

The latest development follows a decision in 2012 by the US District Court for the District of Pennsylvania that Marvell infringed two patents owned by Carnegie, which had filed the claim in 2009.

A jury awarded Carnegie $1.17 billion in damages—based on a royalty rate of $0.50 for every chip sold using the patented technology.

The court later added $287 million after ruling that the infringement was wilful. It also added $79 million to cover the sale of infringing products during litigation, meaning the total fine was $1.54 billion.

Carnegie had originally requested that the $1.17 billion damages be tripled on the grounds that Marvell’s infringement was wilful.

Between 2003 and 2012, Marvell sold 2.3 billion infringing chips globally. Of those, around 1.7 billion were sold outside US borders.

Marvell had appealed against the ruling, stating that the patents were invalid and that the decision on infringement should be reversed. It also claimed that Carnegie waited too long before asserting the claim (laches) and that it did not wilfully infringe the patents.

The federal circuit upheld the validity of the patents and the entire infringement in yesterday’s ruling.

It also dismissed Marvell’s laches defence, but requested a new trial concerning the damages owed for chips that were sold outside the US.

The federal circuit cut the damages owed to $278 million and said a new trial should assess “whether the royalty, in covering all Marvell sales of certain chips made and delivered abroad, improperly reaches beyond US borders”.

On the question of wilfulness, the three judges agreed with Marvell that its defence against the claim was “objectively reasonable”. Damages pertaining to Marvell’s wilful infringement of the patents were removed by the federal circuit.

A spokesperson for K&L Gates, the law firm representing Carnegie, said it was "pleased" with the ruling, which "denied virtually all of Marvell’s defences and upheld the jury’s damages calculation on domestic sales. Research universities such as Carnegie drive innovation and scientific progress".

"The protection of intellectual property rights arising from the cutting edge work of faculty and students is vital to their mission and enables Carnegie, other universities and their commercial partners to obtain a return on the significant resources invested in that research," the spokesperson added.

Marvell had not responded to a request for comment at the time of publication, but we will update the story should the company get in touch.