MW Intel files lawsuit to overturn European patent that threatens to block its exports to Germany
By Louis Goss
Intel Corporation has filed a lawsuit in Milan seeking to overturn a European patent owned by small California microchip designer R2 Semiconductor that threatens to block the Silicon Valley giant from exporting vast swathes of its products to Germany, MarketWatch understands.
The Milan lawsuit sits in the wider context of a high stakes legal battle between Intel and R2 Semiconductor that first started in 2017, when the small Palo Alto company filed an unsuccessful lawsuit against Intel in the U.S. over claims it was using its proprietary technology in its products.
Earlier this month, Daniel Loeb's hedge fund Third Point - which owns an approximately 75% stake in R2 Semiconductor - confirmed it has been funding the California company's years-long legal battle against Intel $(INTC)$.
In filing the Milan lawsuit, Intel is now seeking to invalidate a European patent that was granted to R2 Semiconductor by Europe's centralized patent office in 2020 for technology used to limit the amount of energy used in microchips.
In February, R2 was awarded an injunction by a court in Dusseldorf that could let it block Intel from selling, importing, or manufacturing any microchips that contain the patented technology in Germany. Intel is seeking to appeal the German ruling.
R2 is also scheduled to face Intel at a separate trial in London in April that could see it enforce the European patent in the U.K. Third Point has signaled R2 may seek to enforce its patent in other European countries too.
Intel, which is currently in negotiations with R2, believes the California company is seeking to coerce it into settling out-of-court using the threat of its patent infringement lawsuits in the U.K. Germany, and elsewhere in Europe, MarketWatch understands.
If R2's patent is overturned, Intel has the right under German law to recoup any losses it suffers from the patent being enforced. Third Point has indicated that Intel could suffer billions of dollars in losses if R2 enforces its European patents.
R2 earlier in March also filed separate lawsuits against Fujitsu (JP:6702) and Amazon Web Services $(AMZN)$ seeking to block them from using the patented technology in Intel's products.
Speaking to MarketWatch, an Intel spokesperson called R2 a "patent troll" and said that "as with its invalidated U.S. patent, we strongly believe R2's patent at issue in the German case is neither valid nor infringed, and we have appealed the German court's judgment."
In a statement, R2 CEO David Fisher told MarketWatch: "We are just learning of Intel's filing in Italy. While we have not yet seen it, to us the new action reeks of desperation, as Intel has already been found to infringe the same patent in Germany, and is - along with its customers - under an injunction."
In statements sent to MarketWatch, R2 Semiconductor also denied Intel's claims that it is a "patent troll" and instead said "R2 is a well-established, 15-year-old, California-based tech firm."
The California chip maker also argued that its European patent is fundamentally different from the one Intel successfully challenged in the U.S., meaning "the prior litigation history really has nothing to do with Intel's current predicament."
-Louis Goss
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 28, 2024 11:35 ET (15:35 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments