Chipmaker Marvell loses $1.17 billion patent verdict

Thu Dec 27, 2012 6:33am IST

Stocks

   

REUTERS - A federal jury on Wednesday found that Marvell Technology Group (MRVL.O) infringed two patents held by Carnegie Mellon University, and ordered the chipmaker to pay $1.17 billion in damages.

The award is one of the largest by a jury in a U.S. patent case, and is nearly twice Marvell's profit in its latest fiscal year. It followed a month-long trial in the U.S. District Court in Pittsburgh, the home of Carnegie Mellon.

Jurors also found that Marvell's patent infringement was willful. This could enable the trial judge, Nora Barry Fischer, to award triple damages, a sum close to the $3.96 billion market value of Marvell, whose chips are used for reading and writing data on hard disk drives.

Shares of Marvell fell 10.3 percent on Wednesday, closing down 85 cents at $7.40 on the Nasdaq.

Carnegie Mellon said it was gratified by the verdict. "Protection of the discoveries of our faculty and students is very important to us," it said.

Marvell and its law firm, Quinn Emanuel Urquhart & Sullivan, did not immediately respond to requests for comment.

The company had argued that it had acted in good faith, and the Carnegie Mellon patents were invalid. In a November 29 regulatory filing, Marvell said it intended to litigate vigorously in any potential appeal if it lost at trial.

Carnegie Mellon had accused Marvell of infringing patents used in technology for hard disk drive circuits to read data from high-speed magnetic disks, according to a statement from the university's law firm, K&L Gates.

The law firm said the patents related to systems and methods developed by Carnegie Mellon Professor Jose Moura and a doctoral student, Aleksandar Kavcic, who is now a professor at the University of Hawaii.

Through its verdict, the jury found that Marvell had sold billions of chips incorporating the technology without being licensed to do so, K&L Gates said.

Marvell is based in Hamilton, Bermuda. Its U.S. operating unit Marvell Semiconductor Inc is based in Santa Clara, California, and was also a defendant in the case.

The company posted a $615.1 million profit on net revenue of $3.39 billion in its most recent fiscal year, which ended on January 28. It counts Western Digital Corp (WDC.O) and Seagate Technology Plc (STX.O) among its largest customers.

The trial judge set a May 1, 2013, hearing to consider a final judgment in the case, court records show.

The case is Carnegie Mellon University v. Marvell Technology Group Ltd et al, U.S. District Court, Western District of Pennsylvania, No. 09-00290.

(Reporting by Jonathan Stempel and Nate Raymond in New York and Himank Sharma in Bangalore; Editing by Steve Orlofsky, Leslie Adler, Andrew Hay and Phil Berlowitz)

FILED UNDER:

Monetary Policy Committee

Reuters Showcase

Microfinance

Microfinance

Funding the unfunded: India helps small business borrow to grow  Full Article 

Insurance Sector

Insurance Sector

UK healthcare firm Bupa sees strong growth in India  Full Article 

Sensex Rises

Sensex Rises

Sensex edges up; consumer and healthcare stocks rise  Full Article 

Market Eye

Market Eye

FTSE adds nine Indian firms as large-caps in Asia-Pacific ex-Japan index   Full Article 

Indian Ocean Diplomacy

Indian Ocean Diplomacy

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

ECB Bond-Buying

ECB Bond-Buying

ECB raises growth forecasts, to start printing money next week  Full Article 

China Economy

China Economy

China signals "new normal" with lower annual growth target  Full Article 

Pharma Sector

Pharma Sector

Panel recommends waiving late-stage trials for some drugs  Full Article 

E-commerce

E-commerce

China backs e-commerce expansion in win for Alibaba, JD.com  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage