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Marvell (MRVL) Affirms Patent Infringement Verdict; Will Pay $1.17B in Damages

December 27, 2012 8:04 AM EST Send to a Friend
Marvell (Nasdaq: MRVL) announced that on December 26, 2012, a jury in Pittsburgh delivered a verdict in a lawsuit brought by Carnegie Mellon University ("CMU") against Marvell and Marvell Semiconductor, Inc. ("MSI"), Marvell's U.S. operating subsidiary, in the United States District Court for the Western District of Pennsylvania.

In the lawsuit, CMU asserted that Marvell infringed two CMU patents claiming a specific technique related to read channel detector technology that is not practiced by any Marvell chips. Specifically, the patents at issue are U.S. Patent Nos. 6,201,839 and 6,438,180. Marvell and MSI strongly believe the theoretical methods described in these patents cannot practically be built in silicon even using the most advanced techniques available today, let alone with the technology available a decade ago. Rather, Marvell and MSI use their own patented read channel technology developed in house. Nevertheless, the jury disagreed with Marvell and MSI's position and found that the patents were literally and willfully infringed and valid, and awarded damages in the amount of $1.17 billion.

In the meantime, Marvell and MSI believe there should be no disruption to their business or to customers as a result of the verdict. Marvell and MSI believe that the evidence and the law do not support the jury's findings of infringement, validity and the award of damages. There are strong grounds for appeal and Marvell and MSI will seek to overturn the verdict in post-trial motions before the District Court and, if necessary, to appeal to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. Marvell and MSI intend to vigorously challenge the judgment through all appropriate post trial motions and appeal processes. In addition, the district court in Pittsburgh has yet to rule on certain of Marvell's defenses and motions, including laches and Marvell's renewed request for a mistrial.

As of October 27, 2012, Marvell had not accrued any liability in its financial statements for this lawsuit. In assessing the impact of this jury verdict on its financial statements, Marvell will review the verdict, evaluate the post-trial motions, and evaluate the likelihood of a successful appeal. Marvell has not yet determined the financial impact, if any, to the results of operation for the fourth quarter of fiscal 2013, ending February 2, 2013.




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