Mimesis Law
17 September 2019

MRVL Federal Circuit Decision In Mega-Bucks CMU Case Released

Mixed Bag Appeals Court Decision Likely Means More Years of Litigation

Aug. 4, 2015 (Mimesis Law) — Back in March we provided extensive coverage of the oral arguments in what we termed “Marvell’s Billion Dollar Fight” (see here, here and here) in regards to the big-ticket patent litigation case filed by Carnegie Mellon University against Marvell (MRVL). The District Court proceedings went CMU’s way, with one of the biggest potential patent judgments of all time hanging over Marvell’s head going into the Federal Circuit appeal.

In a long opinion that touched on a number of issues, the Federal Circuit found that CMU’s win on the liability issues was a deserved one, affirming that Marvell is an infringer of CMU’s valid patents. The Federal Circuit also found that CMU had not waited too long to file suit, and Marvell was not entitled to reduced damages as a result of any delay by CMU — especially in light of Marvell’s “copying” of the CMU technology. Finally, the Federal Circuit affirmed that Marvell owes CMU at least $300M or so, counting interest and the like, for sales of infringing chipsets imported into the US, plus potential ongoing royalties for any continued importation of infringing chipsets.

But all was not bleak for Marvell. First, the Federal Circuit threw out the “enhanced damages” for supposed willful infringement completely – shaving about $300M off the original judgment. Second, the Federal Circuit decided that the record was incomplete with respect to the question of whether Marvell’s sales activities in the US for chips made and shipped overseas constituted infringement, and remanded the issue back to the District Court for further proceedings. This second bite at the apple could be a $700-800M swing in Marvell’s favor — if it is able to prove that its sales activities do not amount to infringement. At minimum, today’s decision guarantees that the parties are likely to be litigating for years to come — absent a settlement, which is already being speculated as more likely to happen now that neither side has gotten exactly what they wanted out of the case. Not surprisingly, investors have treated this decision cautiously for now as well, and must be rooting at this point for some kind of settlement that puts all this behind Marvell.

MRVL

The Week(s) Ahead — Expected Events

  1. Decisions on Various Bass IPR Proceedings – TBD

Disclosures and Disclaimers:

Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material. 

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