In 2012, a Pittsburgh jury ordered Marvell Semiconductor to pay Carnegie Mellon University $1.17 billion for infringing two patents related to reducing hard drive "noise." It was the largest patent verdict of all time, and it got bigger when the federal judge overseeing the case knocked the damages up to $1.54 billion and added an ongoing royalty.

A ruling (PDF) today from the US Court of Appeals for the Federal Circuit has cut Marvell's award significantly, affirming only $278 million in damages and ordering a re-trial over other damages issues. The three-judge panel struck all enhanced damages, saying that the additional penalty wasn't warranted. Even though Marvell lost at trial, its patent invalidity defense was "objectively reasonable," and therefore its infringement was not willful.

The parts of the case that need re-trial involve the location of sale of many of Marvell's infringing chips; the judge must re-consider the issue of whether some chips were sold in the United States or not. Chips that were produced abroad, sold abroad, and not imported into the US can't be slapped with a royalty payment based on Carnegie Mellon's US patents.

Even though it's a significant reduction in damages, the appeals court has still upheld a solid win for the university. A judge, jury, and appeals court have now all considered, and rejected, Marvell's invalidity and non-infringement arguments. The appeals court found that the amount of the royalty was fair, and it gave its seal of approval to the ongoing royalty as well. Marvell's attack on CMU's damages expert as a "career litigation consultant with no background in economics" went nowhere.

CMU's eye-popping verdict has likely inspired some of the other universities that have taken their patents to court lately. Today's result will probably enhance that trend, not diminish it.

The infringed patents are numbered 6,201,839 and 6,438,180, and they describe a way of reducing "noise" when reading information off hard disks. Marvell argued that an earlier Seagate patent describes everything in CMU's invention, both at trial and on appeal, but to no avail.