| SAN FRANCISCO, April 17
SAN FRANCISCO, April 17 Patent owner
Intellectual Ventures cannot present key damages evidence in a
lawsuit against chipmaker Xilinx, a U.S. judge has ruled, which
could force an end to the bitter case between IV and one of its
investors shortly before trial.
The ruling against IV comes in the midst of a heated debate
over whether it is too easy for patent owners to extract large
royalty payments, and whether patent buying firms spur or stifle
Created in 2000, Intellectual Ventures has raised about $6
billion and acquired 70,000 patents and other intellectual
property assets. IV is assembling a new patent acquisition fund
with investors including Microsoft Corp and Sony Corp
, while Apple Inc and Intel Corp
declined to participate.
Advocates for patent reform point to the Xilinx litigation
as a crucial source of information about the way patent
aggregators like IV operate. For instance, the case forced IV in
2011 to disclose its full investor list, which fueled
examination of its business model and public discussion, said
Robin Feldman, a University of California Hastings College of
the Law professor who has studied IV.
"If you were to ask me to pick a key moment in the patent
reform debate, that would be on my list," Feldman said.
Xilinx invested in two IV funds and licensed a portion of
IV's patents, court filings show. However, Xilinx refused IV's
entreaties to license more patents, and the chipmaker eventually
asked a California federal judge to declare those IV patents
IV countersued in Delaware, accusing Xilinx of infringement.
Three other chipmakers have settled patent lawsuits with IV on
undisclosed terms, but trial in the Xilinx case is scheduled to
begin in Delaware next month.
In a redacted ruling made public on Thursday, U.S. District
Judge Leonard Stark excluded IV's damages theory from trial.
IV's expert witness on damages did not weigh how IV's investment
agreements with Xilinx factored into proposed royalties, Stark
wrote, making his opinions "unreliable and irrelevant."
Representatives for IV and Xilinx declined to comment on the
In a joint filing on Thursday, IV asked that trial against
Xilinx proceed, and that IV be allowed to submit another damages
report to address the judge's concerns. However, Xilinx says
Stark's ruling on damages should end the case.
The judge on Thursday refused to allow IV to submit more
damages evidence, according to the court docket. Stark ruled the
current trial schedule should be kept for now, but added that he
has not made a final decision on Xilinx's request to end the
Over the years IV and other firms like it have faced
criticism from some in the technology industry, who argue that
firms like IV, which do not primarily make products, exploit the
patent system by demanding royalties and threatening litigation.
IV argues that by buying patents from inventors, it creates
a mechanism for them to capitalize on their ideas. Several large
tech companies previously invested in IV, which gave them
low-cost licenses to IV's vast patent portfolios as well as a
portion of royalties IV collected.
The case in Delaware is Intellectual Ventures I LLC et al
vs. Xilinx Inc., 10-1065.
(Additional reporting by Tom Hals in Delaware; editing by