DCT

1:24-cv-00803

Intel Corp v. VLSI Technology LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: Intel Corporation v. VLSI Technology LLC, 1:24-cv-00803, D. Del., 07/09/2024
  • Venue Allegations: Venue is alleged to be proper based on a forum selection clause within the patent license agreement at the center of the dispute, which designates the District of Delaware for litigation concerning the agreement.
  • Core Dispute: Plaintiff Intel seeks a declaratory judgment that it holds a license to Defendant VLSI's patent portfolio through a 2012 license agreement Intel signed with Finjan, a third party that, like VLSI, is now allegedly under the common control of Fortress Investment Group.
  • Technical Context: The underlying patents in VLSI's portfolio relate to semiconductor design and manufacturing technologies.
  • Key Procedural History: The complaint follows extensive litigation between the parties, including cases in California, Delaware, and Texas. A Northern District of California court recently dismissed an identical counterclaim by Intel, finding that the license's forum selection clause required the affirmative claim to be brought in Delaware. A Texas action involving the same license defense was remanded by the Federal Circuit for the district court to consider the license defense after it was initially denied.

Case Timeline

Date Event
2012-11-20 Finjan Parties and Intel enter into the Patent License Agreement.
2016-01-01 Fortress creates VLSI to acquire patents from NXP (year only provided).
2017-10-02 VLSI files first infringement suit against Intel (N.D. Cal.).
2018-06-01 VLSI files infringement suit against Intel (D. Del.).
2019-03-01 VLSI files second infringement suit against Intel (D. Del.).
2019-04-11 VLSI files three infringement suits against Intel (W.D. Tex.).
2019-05-05 VLSI files two infringement suits against Intel in China.
2020-07-01 Fortress acquires control of Finjan Holdings LLC (month/year only provided).
2020-08-01 Intel sends notice to VLSI/Fortress asserting license rights (month/year only provided).
2021-01-11 Intel files action in Delaware Court of Chancery asserting license rights.
2023-12-04 Federal Circuit reverses W.D. Tex. court's denial of Intel's motion to add license defense.
2024-03-29 N.D. Cal. court dismisses Intel's declaratory judgment counterclaim on forum selection grounds.
2024-07-09 Complaint for Declaratory Judgment filed in D. Del.

II. Technology and Patent(s)-in-Suit Analysis

The complaint is a declaratory judgment action seeking a declaration of license rights to VLSI's patent portfolio and does not assert infringement of any specific patent claims. Therefore, analysis of a particular patented technology is not applicable.

III. The Accused Instrumentality

The complaint does not allege infringement of any patent by an accused instrumentality.

IV. Analysis of Infringement Allegations

The complaint does not contain infringement allegations.

V. Key Claim Terms for Construction

The complaint does not assert specific patent claims, and therefore no claim construction analysis is applicable. The central dispute revolves around the interpretation of contractual terms in a license agreement, not patent claim terms.

VI. Other Allegations

No probative visual evidence provided in complaint.

The core of the complaint is not patent infringement but a contractual dispute over whether a 2012 license agreement between Intel and the "Finjan Parties" now extends to cover the patent portfolio of VLSI, an entity that was not a party to the original agreement (Compl. ¶¶ 44-45). The complaint alleges this coverage arises from the subsequent actions of Fortress Investment Group ("Fortress").

The complaint's central theory is constructed on the following allegations:

  • The Finjan Patent License: In 2012, Intel and the Finjan Parties entered a license agreement granting Intel rights to patents owned or controlled by Finjan and its "Affiliates" (Compl. ¶¶ 49-50). The agreement allegedly defines "Affiliates" broadly to include any entity that "now or hereafter... is under common control with" the Finjan Parties (Compl. ¶ 50). "Control" is defined as "the possession, direct or indirect, of the power to direct the management and policies of a Person, whether through... contract or otherwise" (Compl. ¶ 51).
  • Fortress's Control of VLSI: The complaint alleges that Fortress created VLSI in 2016 for patent monetization, directs its litigation strategy, controls its board of directors, and manages its finances, thereby establishing Fortress's "control" over VLSI (Compl. ¶¶ 10, 55, 60-61).
  • Fortress's Control of Finjan: In July 2020, Fortress affiliates allegedly acquired Finjan Holdings LLC, the parent of the Finjan Parties, and have since maintained control over its board and funding (Compl. ¶¶ 25, 64, 69).
  • The "Common Control" Trigger: The complaint alleges that as of the July 2020 acquisition, Fortress controlled both the Finjan Parties and VLSI (Compl. ¶ 71). This alleged "common control" makes VLSI a future-acquired "Affiliate" of Finjan under the terms of the 2012 license, which in turn subjects VLSI's patents to the license held by Intel (Compl. ¶¶ 25, 71).

VII. Analyst’s Conclusion: Key Questions for the Case

The disposition of this case appears to hinge on questions of contract interpretation and corporate control rather than technical patent analysis. The central questions for the court are:

  1. A core issue will be one of contractual interpretation and factual proof: Does the evidence establish that Fortress Investment Group exercises "control" over both VLSI Technology and the Finjan Parties, as the term "control" is defined in the 2012 Patent License Agreement?

  2. A secondary question will be one of corporate law application: Assuming the factual predicate of common control is met, does the broad "Affiliates" clause, under Delaware law, operate to bind VLSI's entire patent portfolio to a license agreement that VLSI itself never signed?