Marvell (NASDAQ: MRVL), a global leader in integrated silicon solutions, announced that on March 31, 2014, the United States District Court for the Western District of Pennsylvania issued its judgment on the remaining motions in a lawsuit brought by Carnegie Mellon University ("CMU") against Marvell and Marvell Semiconductor, Inc. ("MSI"), Marvell's U.S. operating subsidiary. The Court rejected CMU's motion for an injunction which would block Marvell from selling chips that the jury found to be infringing. The Court also rejected CMU's demand for approximately $326 million in pre-judgment interest, and substantially scaled back CMU's request for enhanced damages. Based on these decisions, the Court calculated the damages, including enhancement, to total approximately $1.54 billion. The Court held that under its decision, CMU is entitled to post judgment interest and an on-going royalty.
Marvell and MSI strongly believe the theoretical methods described in the CMU patents in question cannot practically be built in silicon even using the most advanced techniques available today, let alone with the technology that was available a decade ago when Marvell allegedly first used the methods in question. Rather, Marvell and MSI use their own patented read channel technology that was developed in house. Among other issues, Marvell and MSI intend to argue to the Federal Circuit that the patents at issue are invalid, that even if valid, Marvell did not infringe, and that the Court erred both in its calculation of the royalty rate and in its novel application of that rate to chips manufactured, sold, and used abroad.
Marvell has not accrued any liability in its previously issued financial statements for this lawsuit, nor do we expect to record a liability on our financial statements given current circumstances. We continue to believe that a material loss is not probable based on our assessment of the likelihood of a successful appeal. However, we will continue to evaluate the circumstances in future filings.
Marvell is a global leader in providing complete silicon solutions enabling the Smart lifestyle. From mobile communications to storage, cloud infrastructure, digital entertainment and in-home content delivery, Marvell's diverse product portfolio aligns complete platform designs with industry-leading performance, security, reliability and efficiency. At the core of the world's most powerful consumer, network and enterprise systems, Marvell empowers partners and their customers to always stand at the forefront of innovation, performance and mass appeal. By providing people around the world with mobility and ease of access to services adding value to their social, private and work lives, Marvell is committed to enhancing the human experience.