VLSI v. Intel – Day 6 and Closing Arguments
Yesterday marked the last day of the week-long trial that has pitted some of the best patent litigators in the country against each other, fighting over billions of dollars. In the early part of the day, Intel finished its case and VLSI put on its rebuttal case, consisting mostly of its infringement expert Dr. Conte, plus a short examination of its rebuttal licensing expert Mr. Mark Chambers. After both parties rested, Judge Albright held the charge conference and the case moved to closing arguments.
VLSI’s Closing Argument:
VLSI’s closing argument, given by Morgan Chu, took a different tone and approach than its previous opening argument. Rather than focus on the “Cycle of Innovation” (see our VLSI v. Intel Day 1 coverage), Mr. Chu focused on a different theme – credibility.
Mr. Chu stated that this case is both complicated and simple at the same time. He admitted the technology and the law are complicated, but told the jury that the case is also simple, in that it boils down to the credibility of the witnesses. Specifically, the expert witnesses – the independent witnesses. Before Mr. Chu got into the specifics of expert testimony, he made the point to the jury that of course Intel’s engineers would deny any knowledge of VLSI’s patents.
Mr. Chu went on to recap the testimony of the VLSI and Intel witnesses, and pointed out instances where he believed Intel’s expert witnesses were inconsistent with one another, as well as examples where several Intel witnesses were inconsistent with their prior testimony.
Mr. Chu also recapped the asserted patents, walked the jury through the important claims, and reminded the jury of the two problems the patent allegedly solved – speed and reduced power consumption.
Mr. Chu seemed to focus more on testimony (and the alleged inconsistencies of the Intel witnesses) and his overall theme of credibility, rather than a detailed infringement analysis.
Because the actual damage numbers were not permitted to be shown to the public, Mr. Chu had to reference the slides, shown to only the jury and counsel, by indicating whether the number was highlighted, underlined, etc. So yet again, we don’t know exactly what the number is – only that it’s big (He did reference, like before, that Intel has sold approximately a billion units).
Mr. Chu seemed to stray away from the “stars” and “heroes” analogy he used previously to described the two patents, as well as the “Cycle of Innovation” slide he showed during opening.
Intel’s Closing Argument:
Intel’s closing was delivered in two parts, first by Joe Mueller, followed by Bill Lee. Mr. Mueller started out along the same lines as VLSI-but with a twist:
He began by recapping the testimony provided by Intel’s three engineers who testified about the various Intel products being accused of infringement and why their products did not infringe. He then discussed the experts Intel called to testify concerning infringement and invalidity, and finally Intel’s damages expert.
Mr. Mueller also argued this case boiled down to credibility, but he stated that it was Intel’s goal to provide the “whole truth.” Mr. Mueller argued that Intel sought to provide the jury with the whole story, whereas VLSI attempted to provide only self-serving bits and pieces. His point to the jury – VLSI tells you a partial truth, whereas Intel gives you the full truth.
Mr. Mueller also went back to the “stars” and “heroes” comment Mr. Chu made at the beginning to the case, again emphasizing that these patents were not stars, because NXP did not invest any money into these patents or incorporate the technology into any of NXP’s products. Quite simply – they weren’t stars because until this case nobody had heard of them. He pointed out that it simply wasn’t “credible” to say these patents were “stars” when they were never used.
Mr. Mueller next walked through a detailed discussion of the two asserted patents and why Intel did not infringe either, as well as why Intel’s prior “Yonah” processor was anticipatory art with respect to VLSI’s ’759 patent.
Next Mr. Mueller attacked VLSI’s theory of damages, explaining that VLSI’s theory hasn’t been used in a real licensing negotiation (remember the “made for litigation model” comment made by Intel during opening). He stated that no company has ever paid as much money as VLSI is asking for in this trial for the two asserted patents. He read testimony from Intel’s damages expert where the expert opined that if such a number came across him in a license negotiation, he would have walked away.
He concluded his portion of closing argument by stating (I’m paraphrasing) “in summary, these patents are not stars, they are not heroes, and they are not infringed. So that leaves one question, why are we here?”
With that, Mr. Mueller passed the baton to Bill Lee. Mr. Lee answered the question for Intel right away. “Why is Intel here? Intel is here to defend the work of its engineers.” Mr. Lee also made an effective rebuttal (at least to me) to Mr. Chu’s earlier comments about the credibility of Intel’s engineers. Mr. Lee told the jury that you all work for someone. If called to the stand and sworn in, you wouldn’t lie – you would do the right thing and tell the truth. I saw a few heads nod in the jury box.
Mr. Lee spent a significant amount of time attacking VLSI’s damage model. He alleged, repeatedly, that VLSI’s model was completely unrealistic. He stated that when damages are objectively unreasonable, it harms the economy and the patent system, and that VLSI’s damage number does not promote innovation – it harms it (a swipe at VLSI’s “Cycle of Innovation” slide).
Mr. Lee further attacked VLSI’s Cycle of Innovation slide, arguing that: (1) NXP nor VLSI invented the patents; (2) the PTO didn’t grant these patents to NXP or VLSI; (3) VLSI hasn’t licensed any patents; and (4) not a single dollar has gone from VLSI to NXP.
Mr. Lee concluded with what I believed to be a powerful image: He stated that after 45 years in litigation, he has learned that if you make a “serious accusation, you stand up and prove it.” He then pointed to the Intel engineers asked them to stand, stating that Intel has been here and fought through to the end. He then pointed towards VLSI and remarked that no one from VLSI showed up and remained to the end of trial (VLSI’s CEO left after Day 1 of trial).
As you might expect, VLSI used a significant amount of its remaining time addressing the damages question – why their number made sense and why it was justified. Mr. Chu also walked the jury through the jury charge and each page of the verdict form, asked the jury to find in VLSI’s favor, and again reiterated why Intel infringed the two patents.
After summations concluded, Judge Albright dismissed the jury for the evening. Now deliberations begin!