* Judge finds chipmaker's wrongful conduct "willful"
* Marvell plans to appeal
* Judge calls infringement "long and sustained"
* Marvell shares down 2.5 pct in afternoon
(Adds details from decision, comments by Marvell spokesman,
By Jonathan Stempel
Sept 23 Marvell Technology Group Ltd
failed to overturn a $1.17 billion jury verdict for infringing
two hard disk drive patents held by Carnegie Mellon University,
and a federal judge said the amount may grow because the
infringement was willful.
U.S. District Judge Nora Barry Fischer in Pittsburgh, where
Carnegie Mellon is based, denied Marvell's requests for a new
trial or a reduction in damages, and by finding willful
infringement subjected the chipmaker to possible triple damages.
She said she would issue a decision on damages later.
Fischer faulted Marvell's "all or nothing" strategy of not
offering evidence about its business or pricing strategies that
could have led to lower damages, despite having for a decade
produced technology it knew might been covered by the patents.
"While the court acknowledges this award is large, the facts
show that the infringement was long and sustained," Fischer
wrote in a 126-page decision. "CMU has shown by clear and
convincing evidence that Marvell acted in disregard of an
objectively high likelihood that its actions constituted
infringement of a valid patent."
She added that "while Marvell may believe the court's
purportedly flawed legal analysis precipitated its defeat, it is
the undersigned's impression as a judge and former trial lawyer
that Marvell's bad facts and even worse litigation strategy was
fatal to its cause."
A jury in Pittsburgh awarded the damages in December. The
initial award is the third-largest in U.S. patent litigation
since 1995, PricewaterhouseCoopers said in a June study.
Marvell shares were down 2.5 percent at $12.14 on Monday
afternoon on the Nasdaq.
A Marvell spokesman said the decision "is not a real
surprise," and that the Hamilton, Bermuda-based company will
appeal to the U.S. Court of Appeals for the Federal Circuit.
A Carnegie Mellon spokesman had no comment on the decision.
JURY IS ARBITER, COURT IS UMPIRE
The case concerned patents issued in 2001 and 2002, related
to how accurately hard disk drive circuits read data from
high-speed magnetic disks.
Carnegie Mellon sued Marvell in March 2009, saying at least
nine Marvell circuit devices incorporated the patents, letting
the company sell billions of chips without permission.
According to court papers, Marvell generated $10.34 billion
of revenue and $5.05 billion of operating profit from its
alleged infringing technology.
Fischer said it was only in July 2013 that Marvell began to
"design around" the patents.
She also rejected Marvell's contention that the $1.17
billion damages award, equal to 50 cents per chip, was legally
unsound. A Marvell damages expert had argued that a one-time
$250,000 royalty payment would have sufficed.
"Just because a damages award is large does not mean the
court's standard of review changes. At this stage of the case,
the Court is only an 'umpire,'" Fischer wrote, quoting Chief
Justice John Roberts of the U.S. Supreme Court from his 2005
confirmation hearing. "The nature and scope of the damages to be
awarded was properly left to the jury."
PwC said the biggest patent damages award since 1995 was
$1.85 billion against Abbott Laboratories in favor of
Centocor Ortho Biotech Inc, now part of Johnson & Johnson
, related to arthritis drugs.
In 2012, Samsung Electronics Co Ltd was ordered
to pay Apple Inc $1.05 billion over smartphone
software, but the sum has been reduced and the case remains in
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 and Erin Geiger Smith in New
York; editing by Nick Zieminski and Matthew Lewis)