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Billion Dollar Patent Win

Wins over billion dollars
In patent lawsuit

Apple won a billion dollar patent lawsuit victory over Samsung back in August. We usually think such jaw-dropping judgments are the realm of the biggest of high-tech companies, but a university has recently joined the billion-dollar patent win league.

A Pittsburgh jury awarded Carnegie Mellon University (CMU) $1.17 billion in damages from chip maker Marvell Technology Group. The Bermuda-based company was found guilty of violating two of CMU’s patents, 6,201,839 and 6,438,180 which cover technology that allows data to be read from hard disc drives at higher speeds.

Marvell tried defending themselves in two ways: first, they claimed their products did not infringe the patents in question. Secondly, they claimed that even if their product did infringe the patents it didn’t matter because the patents weren’t valid anyway. They claimed a previously issued Seagate patent covered the same technology.

The jury didn’t buy Marvell’s arguments, and they calculated the damage figure based on the fact that Marvell had shipped some 2 billion chips incorporating the technology in question.

While no company would want to absorb a billion-dollar hit, that’s not the limit of Marvell’s problems. The jury found Marvell guilty of willful infringement, which means that Judge Nora Barry Fischer could award CMU triple damages. If she does decide to award the triple damages, the total cost to Marvell could potentially equal the company’s total market capitalization, which currently stands at $3.77 billion.

There are several lessons that can be drawn from this giga-buck case. The first is that universities own some incredibly valuable intellectual property. The other lesson is that manufacturers should not think that as research centers universities are not going be aggressive about their IP. Especially these days, when universities are increasingly under pressure to get tuition increases under pressure, they are going to be looking for more ways to balance their budgets, and their patent portfolios are a logical place to turn for increased revenues.

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