Chipmaker Marvell has managed to whittle down the amount of patent infringement damages it must pay to Carnegie Mellon University (CMU) after a US court of appeals found that it was only liable for chips that were imported into or sold in the United States.
In 2012, Marvell was slapped with a $1.17bn judgment for infringing two Carnegie Mellon patents on hard drive technology. The amount was later raised to a record-breaking $1.5bn after a US District Court found the company had willfully infringed the university's patents.
On Tuesday, however, an appeals court ruled that while Marvell would still have to pay royalties of around 50 cents per chip, the number of chips for which it was liable for damages was significantly smaller than was found in the original judgment.
Under the new ruling, Marvell will only owe around $278.4m in damages, as opposed to the more than one billion dollars for which it had earlier been held liable.
That figure could yet be raised, however. The Federal Circuit appeals court ruled that a partial new trial is needed to determine the royalties owed on chips that were never imported into the US.
"The parties' chip stipulation ... suggests a substantial level of sales activity by Marvell within the United States, even for chips manufactured, delivered, and used entirely abroad," Judge Nora Fischer ruled, meaning the total amount of damages could ultimately be much higher than was found on Tuesday.
CMU alleges that Marvell copied its hard drive technology without paying patent royalties for around a decade in the 1990s.
The infringing chips themselves sold for around $5 apiece, meaning Marvell would owe CMU around 10 per cent of the revenue it brought in from the silicon.
Broadcom, Google, and Microsoft all filed briefs with the court in support of Marvell, arguing that the earlier, massive damages ruling against Marvell would have a chilling effect that would cause US companies to move their research and manufacturing activities overseas.
Marvell, meanwhile, has argued that CMU's patents are not valid and that it used its own, independently developed technology to make its hard drive chips. A jury disagreed.
The timing of the trial to determine damages for chips sold outside the US has not yet been set. ®