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A Pittsburgh, Pennsylvania jury has found chipmaker Marvell guilty of infringing patents owned by Carnegie Mellon University, resulting in what could prove to be the largest patent damage award in US history.

As reported by The Wall Street Journal, the jury awarded the university a judgment of $1.17bn after determining that Marvell chips developed for use in hard disk drives infringed on CMU-owned patents.

In a particularly damaging blow to Marvell, however, jurors also found that the company was aware of the CMU patents when it developed its infringing technology. Under US law, such a finding of willful infringement could allow US District Judge Nora Barry Fischer to increase the damages in the case to as much as triple the figure awarded by the jury.

If Judge Fischer chose to impose the maximum penalty, it would leave Marvell with a total bill of $3.51bn – an amount equal to 92 per cent of the company's current $3.82bn market valuation.

A relative newcomer in the US chips industry, Marvell was founded in 1995 and quickly rose to become one of the leading fabless semiconductor companies. In addition to tech for disk drives, it develops chips found in a wide range of electronics, including broadband and wireless equipment, storage controllers, LCD displays, and TV set-top boxes.

The patents at issue in the current lawsuit involve inventions developed by CMU professor José Moura and former graduate student Alek Kavcic that allow hard disks to retrieve data accurately from platters spinning at high speeds, thanks to "noise-predictive technology."

Carnegie Mellon first brought suit against Marvell for unlawfully including the inventions in its chips in 2009. Between 2003 and 2012, the university says, the chipmaker shipped some 2.3 billion chips incorporating the technologies.

On Wednesday, the jury sided with CMU, finding that Marvell had infringed in every patent claim asserted by the university in the case.

In a statement, a CMU spokesperson said the university was "gratified" by the verdict in the four-week trial, adding that it did not undertake the suit lightly and that it was a "a hard fought battle every step of the way."

Marvell, on the other hand, disputed the jury's findings and says it will appeal the verdict. In a statement issued on Thursday, company reps reasserted that Marvell had infringed no CMU patents, going so far as to claim that "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."

According to Marvell, the specific techniques used in its chips, although superficially similar to the techniques described in the CMU patents, are actually based on in-house technology covered by Marvell's own patents.

Even if an appeals court finds in Marvell's favor, however, the company will likely not be off the hook. Large jury awards are often reduced on appeal, but even a smaller award could still leave Marvell with a record-setting judgment against it, should it be tripled due to the finding of willful infringement.

Investors do not seem optimistic. Marvell's shares fell by 10 per cent on the news and continued their decline on Thursday, shedding an additional 3.51 per cent to close at $7.14 per share, a new low. ®

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