VLSI Technology

 Some years ago, bashing ‘patent trolls’ was all the rage among the anti-patent community.  Depending on who you asked, a ‘patent troll’ was either (a) a hideous, ugly creature who lurked under bridges and beat innocent passersby with massive patent-shaped cudgels, or (b) anyone who tried to enforce patent rights.  The anti-patent forces got what they wanted in the America Invents Act  (‘AIA’) of 2011, which made patents easier to challenge and harder to enforce.  Stories of patent trolls have faded.

One of the procedures created by the AIA was inter partes review (‘IPR’), which allowed anyone, regardless of whether that person had skin in the game, to attack a patent before the USPTO based on prior art.  In legal parlance, there is no ‘standing’ requirement for IPR.  As long as a challenger can pony up the necessary fees, currently in the range of  $40K plus attorneys’ fees, the challenger can petition for IPR.  If the challenger is successful, the patent is just as dead, regardless of the challenger’s interest. 

Hmm.  Smells like a business opportunity.

That opportunity came when VLSI Technology LLC, the patent owner, sued Intel Corporation, the infringer, in district court for patent infringement.  Intel’s petitions for inter partes review were denied by the USPTO because of the pending court litigation between the same parties.  After a full trial, a district court jury found Intel liable to VLSI for $2.18 Billion for the infringement.  That’s 2.18 BILLION.  Wow – a big number.  VLSI has two other infringement lawsuits against Intel Corporation that are winding their ways through the process.  Intel’s liability, already enormous, could get even bigger.

The sharks started circling.  OpenSky was created just after the jury verdict solely for the purpose of petitioning the USPTO for an IPR.  OpenSky had no other activities and had no interest in the patent or the technology.  OpenSky’s IPR petition copied the earlier Intel petitions and even included two Intel expert witness declarations.  The USPTO found OpenSky’s petition had merit and initiated IPR.

Here’s where the patent-killer-for-hire business opportunity kicks in – OpenSky approached VLSI and said, basically, ‘pay us money and we’ll throw the IPR.’   OpenSky approached Intel Corporation and said,  basically, ‘pay us money and we’ll support the IPR’ .  At this point, Katherine Vidal, Director of the USPTO, stepped in personally.  She sanctioned OpenSky for abuse of process and discovery abuse and effectively threw them out of the IPR.  She also ordered OpenSky to ‘show cause’ why it should not pay VLSI’s attorneys’ fees.  So VLSI won, didn’t it?  Hooray!  Justice was served, right?  


OpenSky is likely a shell with no assets, so a money judgment against OpenSky is likely worthless.  And Intel Corporation, which intervened in the IPR under the USPTO rules, is now appointed as the lead petitioner and can proceed to challenge the patent on the same grounds that it lost in court.   So no victory for VLSI, only another chance to lose in the patent-unfriendly IPR.


Although not germane to today’s topic, here is a link to the most entertaining Supreme Court brief of all time, from the parody publication ‘The Onion.’  The friend-of-the-Court brief was filed in support of a man who was arrested, his house searched, and his computers taken by local police when he published parodies poking fun at the same local police.  It’s not your typical dry legal document.  A sample, describing parody:

Assume that you are reading what appears to be a boring economics paper about the Irish overpopulation crisis of the eighteenth century, and yet, strangely enough, it seems to advocate for solving the dilemma by cooking and eating babies. That seems a bit cruel—until you realize that you in fact are reading A Modest Proposal. To be clear, The Onion is not trying to compare itself to Jonathan Swift; its writers are far more talented, and their output will be read long after that hack Swift’s has been lost to the sands of time. 

Some 300 years ago, Jonathon Swift skewered the conventions of the day and raised parody to an art form in ‘A Modest Proposal,’ ‘Gulliver’s Travels’ and others.

— Robert Yarbrough, Esq.