3 Min Read
(Reuters) - Marvell Technology Group Ltd said on Thursday it will try to void a $1.17 billion damages award imposed by a federal jury that found the chipmaker had infringed two patents held by Carnegie Mellon University.
In a statement, the company said it will seek to overturn Wednesday's verdict in post-trial proceedings in the U.S. District Court in Pittsburgh. It also said that if necessary, it will take its case to the U.S. Federal Circuit Court of Appeals in Washington.
Marvell said it has not determined the financial impact, if any, on operating results for its fiscal fourth quarter ending on February 2, 2013.
The company's shares fell 30 cents to $7.12 in premarket trading, after sliding 85 cents, or 10.3 percent, on Wednesday.
The award is one of the largest by a U.S. jury in a patent infringement case. It followed a $1.05 billion award in August to Apple Inc against Samsung Electronics Co concerning the design of smartphones.
Marvell could also face triple damages because jurors found that the company had acted willfully, meaning that it knew it was using Carnegie Mellon patents without a proper license.
U.S. District Judge Nora Barry Fischer, who presided over the month-long trial, has scheduled a May 1, 2013, hearing to consider a final judgment in the case.
Daniel Amir, an analyst at Lazard Capital Markets, on Thursday said the verdict will likely create an "overhang" on Marvell's shares until the case is resolved, which could take years.
"If the ruling stands, given Marvell's total cash position of $2 billion, we think this could represent a significant blow to the company," wrote Amir, who rates Marvell "neutral."
Carnegie Mellon had sued Marvell in March 2009 over patents issued in 2001 and 2002 related to how accurately hard disk- drive circuits read data from high-speed magnetic disks.
The Pittsburgh university said at least nine Marvell circuit devices incorporated the patents, and that the infringement let the Hamilton, Bermuda-based company sell billions of chips using the technology without permission.
Marvell on Thursday repeated that its chips did not infringe the Carnegie Mellon patents, and that the methods described in the patents "cannot practically be built in silicon even using the most advanced techniques available today."
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 in New York; Editing by Martha Graybow and Maureen Bavdek