Intel is facing a huge cash payout to a company that hasn’t existed for 20 years. A Texas court ordered Intel to pay $2.18 billion for infringing patents owned by VLSI Technology, according to Bloomberg.
VLSI Technology seemed to come back from the dead in 2019 just to sue Intel. The last time VLSI Technology operated as an independent company was in 1999, when Philips acquired the chip design firm for $1 billion.
All of VLSI Technology’s assets were transferred to Philips’ subsidiary NXP (known for NFC chips used in contactless payments). As a result, NXP will also receive part of the compensation from Intel.
VLSI Technology’s most famous project was partnering with Apple and Acorn to create the first ARM processor back in 1985. This design laid the foundation for ARM chips, which power every smartphone today.
VLSI Technology helped design the first ARM chip.
Intel called VLSI Technology a zombie company. Intel’s lawyer William Lee said: “VLSI used two patents that hadn’t been utilized for 10 years and claimed ‘We want $2 billion.’ That’s ridiculous and harms real innovators.”
But that didn’t stop the jury from awarding 1/10 of Intel’s annual profits ($2.18 billion) for infringing two of VLSI Technology’s three patents.
Intel argues VLSI Technology deserves at most $2 million. “Intel strongly disagrees with today’s jury verdict. We plan to appeal and are confident we will win.”
Source: theverge
