Financial windfall for CMU after settling patent infringement suit
February 18, 2016 12:05 AM
Carnegie Mellon University campus.
A cyclist rides infront of Hamerschlag Hall on the campus of CMU.
By Torsten Ove and Bill Schackner / Pittsburgh Post-Gazette
Computer chip maker Marvell Technology Group has agreed to pay $750 million to Carnegie Mellon University to settle a long-running patent-infringement case.
Marvell, based in Bermuda, and CMU announced the settlement Wednesday, bringing an end to litigation that has been winding its way through the federal courts for seven years.
The deal is a huge windfall for CMU.
“Once the inventors receive their portion of the settlement, and all legal fees and related expenses are paid, the university will receive approximately $250 million,” CMU president Subra Suresh said in an email.
The payout for the two inventors — Jose Moura, a professor at CMU’s Department of Electrical and Computer Engineering, and Aleksandar Kavcic, a former student of Mr. Moura’s who is now a professor of electrical and computer engineering at the University of Hawaii — was not disclosed.
Mr. Suresh said the university was “pleased to honor the work of Jose and Alek, two inventors who provided a major step forward in computing technology at a time when computing was transforming our world.”
The case began when CMU sued Marvell in 2009, saying the company infringed on two CMU patents issued in 2001 and 2002 for accurately reading data from hard drives.
Speaking by phone, Mr. Moura told the Pittsburgh Post-Gazette that he and his former CMU student feel “a sense of relief” and “are happy that we reached the end of the road.”
As an academic, Mr. Moura explained, the importance of the settlement lies in a recognition of the work and its value.
“I think that this was an important technology,” he said. “I think it had a tremendous impact on the evolution of the disc drives [of] the last 15 years, and we are happy that finally it is recognized by this agreement.”
In 2012, a Pittsburgh jury awarded the university a 50-cent royalty for each of the 2.2 billion chips Marvell sold using the technology, bringing total damages to $1.17 billion. The amount was among the largest verdicts in the history of patent law.
U.S. District Judge Nora Barry Fischer later awarded CMU an ongoing 50-cent royalty for each chip sold after the time period specified in the verdict.
She also ruled that Marvell was “willful” in infringing on the patents and boosted the damages to $1.54 billion.
The U.S. Appeals Court for the Federal Circuit last summer reversed her on the willfulness ruling but upheld the verdict and the royalty while limiting the damages to the 556.8 million chips made in or imported into the U.S.
The appellate court ruled that a new trial would have to be held to determine if the company had to also pay royalties on all of the 2.2 billion chips it sold and asked the parties to try to reach a settlement.
The deal resolves all appeals, with no future royalty payments by Marvell.
Mr. Suresh said the money would be used to help all CMU students.
“There is broad consensus across the university that we should dedicate a substantial majority of this resource to helping qualified students afford a Carnegie Mellon education, helping all students succeed while they are here, and enhancing the student experience,” he wrote in an email to the global Carnegie Mellon community.
He said a committee will determine how the money is spent. Its members are provost Farnam Jahanian; James Garrett, dean of the College of Engineering; and David Coulter, a member of the executive committee of the board of trustees.
To put the settlement into perspective, CMU’s endowment was $1.7 billion in 2015, according to a study released last month by the National Association of College and University Business Officers and Commonfund Institute.
Torsten Ove: firstname.lastname@example.org or 412-263-1504. Bill Schackner: email@example.com or 412-263-1977.
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