Federal Circuit Report

• Citation: Vol. 49 No. 1
• Publication year: 2024
• Author: Connor Houghton

FEDERAL CIRCUIT REPORT

Connor Houghton
Reichman Jorgensen Lehman & Feldberg LLP

Savannah Carnes
Reichman Jorgensen Lehman & Feldberg LLP

This column discusses the Federal Circuit's recent opinion in VLSI Technology LLC v. Intel Corporation.¹ In this precedential opinion, the Federal Circuit considered an appeal from VLSI's $2.175 billion patent infringement verdict against Intel in the Western District of Texas, which was one of the largest patent infringement verdicts in United States history. The court affirmed the infringement verdict on one of two patents-in-suit, but vacated the damages award and ordered a new trial; reversed the judgment of infringement for the second patent; and reversed the district court's denial of Intel's motion to add a new license defense to the case prior to trial. The court remanded for further proceedings.

BACKGROUND AND PROCEDURAL HISTORY

VLSI and Intel have been engaged in litigation over patents VLSI purchased from NXP Semiconductors since 2017.² In April 2019, VLSI brought a series of patent infringement cases against Intel in the Western District of Texas.³ At issue in this appeal is case number 6:21-cv-00057 ("District Court Case"), which was the first of several cases tried to a jury before Judge Albright. In the District Court Case, VLSI alleged that various Intel microprocessors infringed two of its patents: U.S. Patent No. 7,523,373 ("the '373 patent") and U.S. Patent No. 7,725,759 ("the '759 patent") (collectively, "the Asserted Patents").⁴

The parties filed a number of pre-trial motions. As relevant to the appeal, Intel filed a motion to amend its answer to assert a license defense on November 11, 2020, where it argued it had obtained a license to the Asserted Patents when VLSI's parent company Fortress Investment Group LLC acquired Finjan, Inc. in July 2020, with whom Intel had an existing license.⁵ The district court denied Intel's motion to amend in April 2022 (after trial took place).⁶ The district court also denied various other pre-trial summary judgment and Daubert motions that were raised on appeal, including challenges to VLSI's damages expert testimony.

THE VERDICT AND DISTRICT COURT OPINIONS ON APPEAL

The district court held a six-day jury trial, beginning on February 22, 2021.⁷ On March 2, 2021, the jury returned a verdict in favor of VLSI.⁸ The jury found: 1) Intel literally infringed the '373 patent; 2) Intel did not literally infringe the '759 patent; 3) Intel infringed the '759 patent under the doctrine of equivalents ("DOE"); 4) Intel's infringement was not willful; and 5) Intel had not proven that the '759 patent was invalid as anticipated. The jury also awarded damages of $1.5 billion for Intel's

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infringement of the '373 patent and $675 million for Intel's infringement of the '759 patent.⁹

After trial, the district court addressed various post-trial motions filed by the parties. As relevant here, the district court denied Intel's motion for judgment as a matter of law on non-infringement and damages.¹⁰ The district court found that substantial evidence supported the jury's infringement verdict on the '373 patent, rejecting Intel's arguments on three challenged limitations and finding that there were factual disputes resolved in VLSI's favor by the jury.¹¹ The court then found substantial evidence supported the jury's finding of infringement of the '759 patent under the DOE.¹² And the court rejected Intel's damages arguments, finding they were already resolved by the court's prior Daubert rulings.¹³ The district court entered final judgment on April 21, 2022.¹⁴

FEDERAL CIRCUIT OPINION

The Federal Circuit reviewed infringement, damages, and the district court's exclusion of Intel's licensing defense, in a concise opinion written by Judge Taranto and joined by Judges Lourie and Dyk.¹⁵

First, the court affirmed the jury's finding of literal infringement of the '373 patent. The court held that the jury could have reasonably credited VLSI's expert's testimony on how the accused microprocessors satisfied the claims, and otherwise rejected Intel's attempt to belatedly raise a claim construction that it had not sought before the district court.¹⁶

Next, the court reversed the jury's finding of infringement by DOE for the '759 patent. The court's discussion of doctrine of equivalents stressed the "exceptional" nature of this type of liability,¹⁷ and outlined non-exclusive principles of the doctrine:

• (1) "proof of equivalents must be limitation specific, not focused only on the claim as a whole;"
• ...