IAM
Nisha Shetty
30 May 2025
Intel Corp has persuaded a Texas jury that Fortress Investment Group controls VLSI Technology and Finjan Inc, according to the verdict on 29 May. Intel argued it has a licence to Finjan’s patents and those under common control, including VLSI’s assets. This means the court may rule that VLSI is not entitled to any compensation for Intel’s infringement, impacting multiple cases in the parties’ long-running dispute that has seen many twists and turns over the years.
Patent attorneys suggest that the jury result, as both parties await Judge Alan Albright’s decision on the scope of the licence, provides a powerful reminder for companies about the importance of performing due diligence of existing licences and contracts when considered acquisitions or licences.
Albright in the US District Court for the Western District of Texas oversaw a three-day trial where Intel argued non-infringement of VLSI’s patents because it took a licence with Finjan, a Fortess-affiliated non-practicing entity. Albright had previously denied Intel’s licence defence motion, in which it argued that VLSI and Finjan were affiliates and its 2012 Finjan licence granted Intel the right to VLSI patents under common control.
The jury finding offers some lessons for companies that acquire patents or patent holding companies about the due diligence required when contemplating any acquisitions or licences. Fortress acquired Finjan while VLSI was in the middle of its dispute with Intel.
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“I’m not sure what VLSI could have done, but increased due diligence by Fortress should have uncovered the licence between Intel and Finjan,” says Wendy Verlander, an attorney at Verlander in an email.
What happened here doesn’t necessarily mean that patent licensing companies need to restructure their business entities, she says. “Going forward, based on the results of due diligence for a particular transaction, companies can make decisions about whether to acquire other companies and how to structure any resulting business relationship to avoid this result.”
Additionally, this jury verdict offers a lesson to attorneys writing patent licensing agreements, notes Verlander. “This jury finding was not inevitable, but going forward attorneys should take into account the particular relationships between investors and patent licensing companies, and draft contracts that avoid granting broad licences to potential affiliates.”
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To Verlander, it was not completely clear whether the jury reached the right result, and she says that will make it a challenge to determine what to do going forward vis-a-vis relationships with investors. “Fortress did not own either entity and managed one set of funds for Finjan and another for VLSI,” she explains. “Fortress appeared more like an investor – controlling release of money and having seats on the board – than a typical controlling entity.”
Nevertheless, she says this outcome will, “invariably change how companies approach these situations”.
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