Marvell faces huge patent fine over hard disk chips
- 27 December 2012
- From the section Technology
US chipmaker Marvell Technology faces having to pay one of the biggest ever patent damage awards.
A jury in Pittsburgh found the firm guilty of infringing two hard disk innovations owned by local university Carnegie Mellon.
It said Marvell should pay $1.17bn (£723m) in compensation - however that sum could be multiplied up to three times by the judge because the jury had also said the act had been "wilful".
Marvell's shares fell more than 10%.
The maximum penalty would be close to the $3.96bn value of the company, based on its market capitalisation.
Marvell told the Wall Street Journal it would try to convince the judge to reverse the judgement, and would appeal if that failed.
The university's law firm issued a statement saying it took "pride" in securing the award following Marvell's failure to license the university's intellectual property.
Marvell makes a range of chips which includes processors which power devices including Blackberry smartphones, Sony Google TV internet video boxes and LED lighting controllers, as well as hard disks.
Among the disk makers, Western Digital has been its biggest customer over recent years.
Carnegie Mellon had accused Marvell of including technologies - invented by one of its professors and a student - designed to increase the accuracy disk drives read data at high speeds.
The university told the court the firm had sold 2.3 billion chips incorporating the disputed inventions between 2003 and 2012.
Marvell had argued both that its chips had not used the university's tech, and that the patents should never have been awarded in the first place - but the jury disagreed.
The damage award has the potential to be the biggest in US patent history.
There have only been two larger previous awards, according to law data provider Lex Machina.
In 2007 Microsoft was ordered to pay Lucent Technologies $1.52bn in damages over disputed MP3 and MPEG video technologies; and in 2009 Abbot Laboratories was ordered to pay Centocor Ortho Biotech $1.67bn for infringing its antibodies biotech patents - however, both judgements were later overturned.
That leaves the recent $1.05bn jury award to Apple in its case versus Samsung as the largest outstanding figure - the judge in the case has yet to finalise the sum.
However, one expert said it would be some time before the details of the disk drive dispute would be finalised.
"It is generally the case that US juries make large awards, and it is generally the case that they get reduced on appeal," Ilya Kazi from the UK's Chartered Institute of Patent Attorneys told the BBC.
"If history repeats itself Marvell could face a smaller sum - but it's still too soon to be sure how the process will play out."