Marvell Pays CMU $750M to End Feud

Marvell had already lost the patent infringement case brought against it by Carnegie Mellon; the only issue was the size of the payment.

Brian Santo, Senior editor, Test & Measurement / Components, Light Reading

February 17, 2016

2 Min Read
Marvell Pays CMU $750M to End Feud

Marvell Technology is finally paying Carnegie Mellon University three years after losing a patent infringement suit the school filed against the company. Marvell owes the university $750 million.

The legal wrangling between the two began in 2009 when Carnegie Mellon University filed a suit claiming Marvell Technology Group Ltd. (Nasdaq: MRVL) was infringing two of its patents with several lines of read channel devices.

Marvell challenged. The case went through several stages, and the company lost at every step that mattered, including a 2012 jury verdict in the US District Court of Western District of Pennsylvania that awarded CMU approximately $1.5 billion plus ongoing royalties.

Pursuant to court-ordered mediation, Marvell has agreed to pay CMU $750 million, with no ongoing royalty payments. The company no longer makes the infringing parts. This settlement concludes the legal matter and will resolve all pending appeals, both parties said.

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The payments will take a bite out of Marvell's bank account. The company said it had cash and short-term investments that exceeded $2.3 billion as of January 30, 2016. Marvell said it had previously recorded approximately $388 million for litigation reserves in fiscal 2016 related to CMU lawsuit.

The suit merely compounded Marvell's troubles. The company was struggling in at least one of its markets. Last year it revealed the existence of accounting irregularities and so far has missed two quarterly reports. And recently an investment group purchased a minority stake big enough to start dictating courses of action should it decide to do so. (See Activist Investor Latches On to Marvell.)

As for CMU, it said, "Once legal fees and related costs are paid, the proceeds from the Marvell settlement will be divided between the inventors and the university. The university expects to receive approximately $250 million."

— Brian Santo, Senior Editor, Components, T&M, Light Reading

About the Author(s)

Brian Santo

Senior editor, Test & Measurement / Components, Light Reading

Santo joined Light Reading on September 14, 2015, with a mission to turn the test & measurement and components sectors upside down and then see what falls out, photograph the debris and then write about it in a manner befitting his vast experience. That experience includes more than nine years at video and broadband industry publication CED, where he was editor-in-chief until May 2015. He previously worked as an analyst at SNL Kagan, as Technology Editor of Cable World and held various editorial roles at Electronic Engineering Times, IEEE Spectrum and Electronic News. Santo has also made and sold bedroom furniture, which is not directly relevant to his role at Light Reading but which has already earned him the nickname 'Cribmaster.'

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