Court Vacates $1.1 Billion Lawsuit Win for Caltech, New Trial Ordered

The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., has vacated a jury verdict that awarded Caltech up to $1.1 billion in damages for infringement of the university’s Wi-Fi technology patents by Apple Inc. and Broadcomm Inc.

While upholding the Los Angeles jury’s findings that Apple and Broadcom infringed two Caltech patents, the appeals court said the January 2020 award – one of the largest ever in U.S. patent cases – was not supported by evidence.

The court also ordered a new trial on whether Apple and Broadcom infringed a third patent and to determine how much the two companies should pay Caltech.

In 2016, Caltech sued Apple and Broadcom alleging that hundreds of millions of Apple products – iPhones, iPads, Apple watches and others – using Broadcom chips infringed its data-transmission patents. The Los Angeles jury ordered Apple to pay Caltech $837.8 million, and Broadcom to pay an additional $270.2 million.

Writing on behalf of the Court of Appeals, Circuit Judge Richard Linn rejected the argument that Caltech could have simultaneously negotiated a license with Apple for devices containing Broadcom chips, and a license with Broadcom for chips used elsewhere.

“The mere fact that Broadcom and Apple are separate infringers alone does not support treating the same chips differently at different stages in the supply chain,” Judge Linn said. “Caltech’s two-tier damages theory is legally unsupportable on this record.”

Apple is a major purchaser of Broadcom chips. The two companies agreed in January 2020 on a $15 billion supply agreement that ends in 2023. Broadcom recently estimated 20 percent of its revenue is derived from business from Apple.

Speaking to Reuters, Caltech spokeswoman Shayna Chabner said the university was confident the value of its patents would be “fully recognized” at a new damages trial.

Caltech has reportedly also sued Microsoft, Samsung Electronics, Dell Technologies and HP for alleged infringement of the same patents. The cases are pending.