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Texas readers may not be aware that in 2012, a jury ordered Marvell Technologies, which makes computer chips, to pay $1.51 billion in damages for infringing on patents owned by Carnegie Mellon University (CMU). When the tech industry heard about the award, several companies, who are ordinarily competitors, banded together to file an appeal in federal court. Recently, the appeals court agreed that the jury overstepped in its interpretation of U.S. patent law.

The jury awarded $.50 for each chip Marvell sold from 2003 through 2012. This amounted to approximately 2,338,380,542 chips. Additional amounts were added to the award by the judge for sales from that period to present and enhanced damages of 23 percent in accordance with 35 U.S.C. section 284.

On appeal, the enhanced damages were thrown out because the court ruled they were not appropriate in this case. More importantly to the tech companies, however, is the fact that the appeals court took issue with the number of chips included in the calculation of the award. Marvell sells the chips worldwide, and that number reflects all of them, not just the ones sold here in the United States.

Patent law requires that infringement cases be filed in the United States if they are U.S. patents. Therefore, a Texas patent owner who believes another company is using its patented materials without permission and files an infringement case here in the United States can only seek damages for unauthorized activity in this country. Due to the complexities of patent litigation, it would be beneficial to seek the advice and assistance of counsel familiar with the applicable laws.

Source: Fortune, "Appeals court cut of $1.51B patent award is relief for tech industry", Jeff John Roberts, Aug. 5, 2015

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