Computer chipmaker Intel Corp. suffered a major blow today after losing a high-profile patent infringement trial and being ordered to pay $2.18 billion in compensation.

Intel had denied infringing on two patents owned by VLSI Technology LLC, saying that one of them was invalid because it covers work that was also performed by its own engineers, but the jury rejected its arguments.

The patents in question cover innovations that help increase the power and speed of computer processors, Bloomberg reported. It added that the award is one of the largest awards related to patent damages in U.S. history.

One of Intel lawyer William Lee’s arguments was that VLSI is essentially what’s known as a “patent troll,” which refers to a company that exists simply to buy patents and sue other companies for infringing on them. Lee told jurors in the case that VLSI was founded just four years ago and has no products or revenue.

He argued that VLSI had simply taken “two patents off the shelf that hadn’t been used for 10 years” and demanded $2 billion in compensation. He said it was an “outrageous” demand that would “tax true innovators.”

One of the patents was originally issued to a company called Freescale Semiconductor Inc. in 2012, while the other was filed by a firm called SigmaTel Inc. in 2010. Freescale later acquired SigmaTel, before being acquired itself by the Dutch chipmaker NXP Semiconductor NV in 2015. The patents were then sold by NXP to VLSI in 2019, though NXP would be entitled to some of the award, Bloomberg said.

Intel didn’t lose all of its arguments. The jury found that there was no “willful infringement” of the patents but said it was guilty of “willful blindness” because it didn’t check to see if it was using someone else’s innovations. Had the jury found otherwise, District Court Judge Alan Albright could have increased the award amount by up to three times.

Analyst Holger Mueller of Constellation Research Inc. said today’s judgment serves as a reminder to companies large and small that not knowing about patent infringement does not indemnify the perpetrator. “To a certain extent it’s really quite embarrasing for Intel not to have done its due diligence on this,” he said.

Despite that, Intel said in a statement after the judge’s decision that it “strongly disagrees” with the verdict. It intends to appeal and remains “confident that we will prevail.”

Rob Enderle, an analyst with Enderle Group, told SiliconANGLE that this case is far from over. He explained that jury trials such as this one are often overturned on appeal as the jurors usually have trouble understanding the technical issues of the case.

“The appeal will suspend the judgment while it is being heard, and, given the current backlog, I wouldn’t expect this to be resolved this year unless the parties come to some settlement,” Enderle said. “VLSI is on a list of known patent trolls which could also lower their eventual award. I would expect that this will motivate Intel to lobby more heavily for restrictions on patent trolls in future.”

Moor Insights & Strategy analyst Patrick Moorhead told SiliconANGLE that VLSI shouldn’t be confused with companies such as Qualcomm Inc., which actually create intellectual property themselves and then license it. Rather, it just buys up patents and then attempts to force other companies to pay to use it, he said.

“Intel will likely appeal, but even if the company has to pay, it has more than enough cash to pay the penalty,” Moorhead said. “I would also expect Intel to countersue VLSI on one of its patents to arrive at some kind of cross-license agreement ultimately.”

Intel certainly has enough money in the bank to cover all eventualities, as the award amounts to about half its most recent, fourth-quarter profit. Still, the verdict is another blow for a company that, although still leading the multibillion-dollar computer chip industry, is struggling to maintain that dominance.

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