VLSI Technology LLC v. Intel Corporation
- Beth Freeman
- 5:17-cv-05671
- U.S. District Court · Northern District of California
- 8
In VLSI v. Intel, Judge Freeman denied VLSI’s request to overturn a pretrial ruling striking two inadequately disclosed patent-damages theories.
VLSI Technology LLC was affected because the court left in place the exclusion of its expert’s Value Per Unit and Net Present Value damages theories. Intel Corporation benefited from the denial of VLSI’s motion.
What happened
VLSI Technology LLC accused Intel Corporation’s Turbo Boost Max Technology 3.0 feature of infringing a patent. A magistrate judge struck two damages theories offered by VLSI’s expert—Value Per Unit and Net Present Value—because VLSI had not adequately disclosed them in its damages contentions. VLSI Technology LLC v. Intel Corporation concerned VLSI’s request to reverse that decision.
VLSI argued that it had disclosed both theories using different labels and cited documents describing the accused feature’s economic value. The court agreed that one document was adequately disclosed and that terms such as “upsell,” “sell-up,” and increased value per unit described the same basic idea. But it found that VLSI had not disclosed the underlying data needed for the Value Per Unit calculation or adequately disclosed the Net Present Value theory and supporting data.
The court found no clear error in the magistrate judge’s decision and denied VLSI’s motion for relief. Judge Beth Labson Freeman therefore left in place the order striking both damages theories.
The detailed version
- VLSI Technology LLC v. Intel Corporation · No. 5:17-cv-05671
- Beth Freeman
- Oct. 23, 2023
Background
VLSI accused Intel’s Turbo Boost Max Technology 3.0 feature of infringing U.S. Patent No. 8,566,836. VLSI’s damages expert, Dr. Ryan Sullivan, offered Value Per Unit (VPU) and Net Present Value (NPV) theories for the patent. Intel moved to strike those theories, arguing that VLSI had not disclosed them in its Fifth Supplemental Damages Contentions.
Magistrate Judge Nathanael M. Cousins granted Intel’s request as to the two theories. VLSI then filed an objection and asked the district court for relief from that nondispositive pretrial order under Federal Rule of Civil Procedure 72. The district court could reverse the magistrate judge’s order only if it contained “clear error,” meaning a definite mistake in the decision.
Value Per Unit Theory
VLSI argued that its references to “upsell,” “sell-up,” increased average sale price, and increased value per unit disclosed its VPU theory. The court agreed that these terms describe the same basic damages concept: an increase in the sale price of a unit. It also concluded that VLSI had not waived this argument and that at least some of its disclosures referred to economic value rather than only technical benefits.
The court nevertheless agreed with Judge Cousins that VLSI had not properly disclosed the underlying data for Dr. Sullivan’s VPU calculation. VLSI did not address whether the specific sales-increase data used by Dr. Sullivan had been disclosed in its damages contentions. The court therefore found no clear error and denied VLSI’s motion for relief as to the VPU theory.
Net Present Value Theory
VLSI argued that its contentions disclosed the documents supporting Dr. Sullivan’s NPV theory, including an email describing the accused feature as a financial opportunity and other documents cited in discussions of the patent’s technical value and benefits. The court disagreed that Judge Cousins had overlooked the email, noting that VLSI had not directed him to it in its earlier briefing.
The court further held that the email, standing alone, did not adequately disclose an NPV damages theory. It also found that the other documents VLSI identified appeared in a string citation describing testing data, which did not disclose an NPV theory or the data supporting one. The court therefore found no clear error in striking the NPV theory.
Disposition
The court held that Judge Cousins committed no clear error in excluding the VPU and NPV theories. It ordered that VLSI’s Motion for Relief from the Magistrate Judge’s Nondispositive Pretrial Order, ECF No. 652, was DENIED. The order addressed the pretrial disclosure of damages theories; it did not decide whether Intel infringed the patent or determine the amount of damages.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.