Wednesday, June 9, 2021

Intel reinforces four post-trial motions to do away with VLSI Technology's $2.2B jury verdict in Western District of Texas patent case

For the time being, the $2.175 patent damages verdict from the first VLSI Technology v. Intel patent trial in the Western District of Texas is still the record holder. But it would be unprecedented for a verdict like that to survive post-trial and appellate proceedings without the slightest adjustment--and even "slight" would be a lot in absolute terms here.

Intel was cleared of infringement in the second VLSI v. Intel trial, and the third one was originally slated for this month, but has been pushed back to December. So the first case is still where the action is.

Last month I commented on Intel's post-trial motions and VLSI's responses. Intel brought four different motions, one of which would do away with about a third of the amount while the other three would either resulted in the verdict being tossed or a new trial being held.

I want to be perfectly honest: I didn't follow the March trial, and I can't claim to have studied the publicly-accessible documents in full detail. So if I express an opinion now on what I believe may happen, it's just the gut feeling of someone who's been watching U.S. patent cases for more than a decade. I'm talking about what instinctively looks to me like it might tip the scales. It might not--or other arguments might be better. But at the end of the second trial I had a hunch that Intel's non-infringement arguments might sway the jury, and they did. Also, we're getting ever close to the appeal now.

Having said that, I really can't imagine the $2.175B verdict would stand. Verdicts have been vacated or substantially adjusted on lesser grounds than some of the arguments Intel makes here. The short-term question is, however, what Judge Alan Albright of the United States District Court for the Western District of Texas decides. He could uphold the verdict, but would then be highly likely to be reversed; he could order a new trial and avoid at least some of the issues; or he could make adjustments as a matter of law. It's not a foregone conclusion that the verdict will be turned into the district court's judgment.

The parties are fighting very hard--what else would anyone expect them to do with so much money at stake?

A good example is this dispute (PDF) over whether the parties should attach proposed findings of fact and conclusions of law only to their initial post-trial motions and the responsive filings--or whether Intel legitimately attached such material to its reply brief (PDF) in support of its motion to hold the '759 patent not to be infringed under the Doctrine of Equivalents. Intel said this was just the same as a rebuttal in a bench trial; VLSI says it should be allowed a sur-reply, or otherwise Intel's reply shouldn't count either.

Right now, I feel the argument most likely (just relatively speaking) to persuade Judge Albright is that the jury relied on non-comparable license agreements the court shouldn't have admitted (and didn't admit in the second trial between the same parties). If the judge agreed with that, he'd merely be consistent, and a new trial would give him the opportunity to fine-tune some other things. Here's Intel's reply brief in support of its Rule 59 motion for a retrial (this post continues below the document):

21-05-28 Intel Riso Rule 59... by Florian Mueller

Fortress-funded VLSI argued in its response to the original Rule 59 motion that it pointed to those other Intel licenses (which apparently were settlements, at least in part) only to rebut what an Intel expert had told the jury about other license deals Intel had struck. Intel now argues that the licenses its expert relied upon were comparable while the others were not. That is something I can't verify, but if I were the judge, this here would really give me pause:

"[T]he Court ruled those agreements were admissible before Mr. Huston [Intel's aforementioned expert] testified." (emphasis in original)

Intel makes other arguments for a retrial, some of which appear to overlap with its argument for reducing the damages award to zero, claiming that VLSI had not presented any damages theory the jury could rely on--that's aggressive and ambitious.

As for Intel's JMOL argument (according to which the court should overrule the jury), its reply brief also makes some interesting points. My feeling is that even if some of them convinced the judge, he might just order a retrial. But I could be wrong. The JMOL arguments will definitely be worth looking at in greater detail if and when this case goes up to the Federal Circuit.

If the judge agreed with Intel's JMOL motion on the patent accounting for two thirds of the damages verdict, that would have a huge impact--and the other patent could be found non-infringed under the Doctrine of Equivalents. The DoE argument that I found pretty good is the first one: the original claim referred to "at least one master device" or "at least one of the plurality of master devices"--but that passage was changed into "a master device." VLSI denies that this was meant to narrow the claim scope. But Intel's contextual arguments seem reasonably strong. The Federal Circuit has pronounced a strong presumption against claim changes at the application stage being just editorial and not having a substantive effect. Intel's reply brief cites to Laitram v. NEC ("difficult to conceive of many situations in which the scope of a rejected claim that became allowable when amended is not substantively changed by the amendment").

The part I can't form an opinion on is Intel's unclean hands argument. The reply brief is so heavily redacted that I really can't figure out where the discussion stands. Based on the previous filings, I had the feeling that some parts of the other post-trial motions were more likely to succeed. Again, I could be off base. But I've often speculated, and my hit rate is not too bad.

Share with other professionals via LinkedIn: