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Marvell Technology Group argues to pay less in damages for infringing on CMU patent

| Wednesday, May 1, 2013, 10:20 p.m.

A $1.17 billion verdict is a “big number” but that alone doesn't justify reducing an award, a lawyer for Carnegie Mellon University argued Wednesday in the first of two days of post-verdict motion hearings in the university's patent case against a Bermuda-based chip manufacturer.

The law allows a judge to reduce a verdict that “shocks the conscience,” but if Marvell Technology Group Ltd pays the damages, it will still realize more than $4 billion in operating profits from the more than $10 billion it made from computer chips that used the university's patents, Patrick J. McElhinny said.

“That's not a shocking result when you put it in context,” he said.

A nine-person federal jury on Dec. 26 ruled that Marvell produced chips since 2003 that infringed on two patents CMU holds for noise-detection technology used in computer hard drives. The damage amount is based on a royalty of 50 cents for each of the 2.2 billion chips the company sold.

While Marvell contests the entire verdict, it argued Wednesday that, at the least, U.S. District Judge Nora Barry Fischer should reduce the damages to the number of chips it says were used inside the United States.

At most, that number could be about 557 million chips but actually should be 329 million, which would reduce damages to about $165 million, said Kathleen M. Sullivan, one of Marvell's attorneys.

“All the chips in the case are produced outside the United States,” she said. “The question is which chips came into the United States.”

In addition to disputing the number of chips subject to the royalty calculation, Marvell claims a more reasonable royalty is 3 cents per chip, which would bring the damages down to $9.9 million, Sullivan said.

McElhinny countered that the question is the infringing activity that led to the sales of the chips, and that activity happened inside the country, mainly at Marvell's U.S. headquarters in Santa Clara, Calif.

“The damage award is solidly rooted in the United States,” he said.

As for the rate, Marvell waived that argument when it didn't challenge it during the trial, he said.

CMU is asking Fischer to enhance the damages — up to tripling them — to punish Marvell for willfully infringing on its patents.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com.

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