CORRECTED-UPDATE 1-Marvell loses patent case, damages top $1 bln

Wed Dec 26, 2012 4:59pm EST

(Corrects headline, first paragraph and first bullet point to show that company found to have infringed patents, not found guilty; corrects typo in 3rd bullet point on percentage drop in share price)

* Jury finds that company infringed Carnegie Mellon patents

* Damages could be tripled because of willful infringement

* Marvell shares fall as much as 13 percent

By Jonathan Stempel

Dec 26 (Reuters) - Marvell Technology Group was found to have infringed two patents held by Carnegie Mellon University and ordered to pay $1.17 billion in damages in a jury verdict on Wednesday in federal court.

The jury, in the case heard in U.S. District Court in Pittsburgh, also found that Marvell's patent infringement was willful, which could enable the trial judge, Nora Barry Fischer, to award triple damages.

Shares of Marvell, a maker of chips used in PCs and servers, fell as much as 12.8 percent.

Marvell was accused of infringing two patents for technology to increase the accuracy with which hard disk drive circuits read data from high-speed magnetic disks, according to K&L Gates, a law firm representing Pittsburgh-based Carnegie Mellon.

Through its verdict, the jury found that Marvell had sold billions of chips incorporating the technology without being licensed to do so, the law firm said in a statement.

The jury verdict followed a month-long trial, according to a form made public in U.S. District Court for the Western District of Pennsylvania.

Marvell did not immediately respond to requests for comment. Edward DeFranco, one of its lawyers, did not immediately respond to a similar request.

In the court case, Marvell argued that it did not infringe or subjectively intend to infringe Carnegie Mellon patents and that the patents were invalid.

Marvell is based in Hamilton, Bermuda, and makes controller chips used for reading and writing data on hard disk drives. The company counts Western Digital Corp and Seagate Technology Plc among its largest customers.

K&L Gates said the patents related to information storage technology 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.

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 in New York and Himank Sharma in Bangalore; Editing by Steve Orlofsky, Leslie Adler and Phil Berlowitz)

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