Vidal steps into controversial $2bn PTAB review
The director of the US Patent and Trademark Office, Kathi Vidal, will review a Patent Trial and Appeal Board (PTAB)’s decision to scrutinise the validity of a VLSI tech patent that led to a $2.18 billion infringement verdict against Intel.
The development marks the first time Vidal has invoked her director’s authority to intervene in PTAB decisions, a power that was confirmed by the landmark ruling, Arthrex v US (2021).
She confirmed her decision in a pair of orders released yesterday, June 7.
Background
The controversial legal dispute arose in April 2019 when VLSI sued the California-based chipmaker at the US District Court for the Western District of Texas (Waco), alleging that it had infringed the patents.
According to VLSI, the patents-in-suit were essential to Intel’s ability to make chips faster and with fewer energy requirements.
But Intel denied using the disputed inventions and countered that VLSI’s requested damages was more than 3,000 times what the patents were valued at in past acquisitions.
The chipmaker also argued that VLSI does not produce tech products and that its only potential revenue derived from this lawsuit.
Intel was also prevented from instituting a review of the patents at the PTAB, after the board invoked the NHK-Fintiv rule that allows for a decline of a requested review if the disputed patent is being asserted in ongoing parallel district court litigation.
Record damages
In March 2021, VLSI secured the record damages verdict for Intel’s alleged infringement of US patent number 7,523,373 and 7,725, 759, marking one of the largest patent damages awards in US history.
Two entities formed after the verdict, Open Sky Industries and Patent Quality Assurance, then brought a validity challenge to the patents at the PTAB against a VLSI Tech.
Earlier this year, the PTAB confirmed that it would review the validity of the ‘373 patent on the grounds that there was a reasonable likelihood that parts of the patent were invalid.
VLSI appealed this decision to the US Precedential Opinion panel at the USPTO, but Vidal confirmed this week that she would review the decision instead.
In April, Senators Thom Tillis and Mazie Hirono issued a letter to Vidal expressing concern over the PTAB decisions, holding that the entities had brought the proceedings to “manipulate the USPTO for their own financial gain”, in “an apparent attempt to extort money” from VLSI.
VLSI was acquired in June 1999, for about $1 billion, by Philips Electronics and is today a part of the company’s spin-off NXP Semiconductors.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox
Today’s top stories
