Intel v. Broadcom

The Situation

In August 2000 Intel Corporation filed a lawsuit against Broadcom Corporation alleging that Broadcom products infringed five Intel patents. A jury trial was held at the U.S. District Court in Delaware on two of the five patents, relating to video decompression and Local Area Networks (LANs). Intel sought $246 million (after trebling of claimed damages) and threatened Broadcom with the possibility of an injunction against its video and networking chip product lines.

NERA's Role

Counsel for Broadcom retained NERA Senior Vice President Alan Cox to review plaintiff’s damage analysis, which consisted of both lost profits and lost royalty claims. Dr. Cox also submitted a report in which he presented his own estimate of damages, if liability was found. He defended the report at deposition and in testimony at trial. Dr. Cox demonstrated that the opposing expert’s lost profits claims were exaggerated and were inconsistent with an accurate identification of the markets in which the two companies competed. Dr. Cox also investigated the nature and role of the patents, industry licensing practices, the companies’ strategies and other factors to determine reasonable royalties for the two patents. He showed that the opposing expert’s royalty claims were excessively high and well outside what would have occurred in a hypothetical negotiation between two willing parties. Damages were shown to be in the range of $1.6-11 million, far lower than the claims made by Intel.

The Result

The jury, following a three-week trial, found that Broadcom had not infringed either of Intel's patents in question. The jury also found Intel's computer networking patent to be invalid. This case was described as one of the top 20 defense verdicts of 2001 by the National Law Journal.