U.S. agency panel to review VLSI patent in $2.2 bln Intel case

(Reuters) – A U.S. Patent and Trademark Office tribunal has agreed to review the validity of one of the patents behind Intel Corp’s $2.18 billion trial loss to VLSI Technology LLC, opening a potential pathway for the chipmaker to overturn part of the verdict.

USPTO director Kathi Vidal earlier this month sanctioned the company that sought the review, OpenSky Industries LLC, finding it attempted to extort both Intel and VLSI. But OpenSky’s petition was strong enough to justify Patent Trial and Appeal Board review regardless of its alleged misconduct, a three-judge PTAB panel said Friday.

Representatives for Intel, VLSI, and the PTO did not immediately respond to requests for comment Monday.

VLSI said in a previous statement that allowing the proceeding to continue would wrongly reward Intel, which had already lost on other board challenges to the patents.

OpenSky could not be reached for comment. Andrew Oliver of Amin Turocy & Watson, who represented the company before the board but said he did not handle the problematic settlement negotiations cited by Vidal, praised the decision.

A jury in Waco, Texas last year awarded VLSI nearly $2.2 billion from Intel, finding the company infringed two VLSI patents. The Waco jury awarded VLSI $675 million in damages for the patent at issue in the OpenSky proceeding.

Vidal announced in June that she would review board decisions to hear validity challenges to both VLSI patents from OpenSky and another company, Patent Quality Assurance LLC.

Both companies were formed after the verdict and have no apparent connection to Intel. Vidal’s review of the PQA case is still in progress.

Vidal said in an Oct. 4 order that Nevada-based OpenSky had offered to sabotage its own case if VLSI paid it off, and separately requested payment from Intel in exchange for winning.

The director banned OpenSky from participating in the proceeding. But Vidal also said the PTAB case should continue with Intel at the helm if the petition “presents a compelling, meritorious challenge.”

The board found Friday that the petition met this heightened standard. The PTAB judges said it was “highly likely” that challenged parts of the patent were invalid based on earlier patents and applications cited by OpenSky that supposedly disclosed the same innovations.

A successful challenge could eventually knock out the damages award for the parts of the patent declared invalid. VLSI can appeal an invalidity decision to the U.S. Court of Appeals for the Federal Circuit.

The case is OpenSky Industries LLC v. VLSI Technology LLC, Patent Trial and Appeal Board, IPR2021-01064.

For OpenSky in the PTAB proceeding: Andrew Oliver and Vinay Joshi of Amin Turocy & Watson

For Intel: Benjamin Fernandez, David Cavanaugh and Steven Horn of Wilmer Cutler Pickering Hale and Dorr

For VLSI: Babak Redjaian of Irell & Manella, Kenneth Weatherwax of Lowenstein & Weatherwax

Read more:

USPTO director sanctions patent challenger in $2.1 bln Intel dispute

USPTO director wades into fight over $2.1 bln Intel patent verdict

Intel loses U.S. patent trial, ordered to pay $2.18 billion to VLSI Tech

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