Intel avoided paying patent fees this week after a Texas court found infringement of two old patents owned by VLSI. Intel successfully fended off claims that it used patented technology originally developed by NXP Semiconductors and now owned by VLSI to speed up its CPUs. [VLSI had claimed that Intel was using technology that infringed two patents it had obtained from NXP Semiconductors, a Dutch chip manufacturing company spun off from Philips. The company was also seeking a massive $3.1 billion in damages.

Thankfully for Intel's accountants, Intel won the case.

Nevertheless, there is still hell to pay, as Intel lost its initial battle with VLSI. The jury found Intel guilty of infringing on patents held by VLSI for the purpose of increasing the power and speed of its processors and ordered the company to pay $2.18 billion in damages.

VLSI said that the damages were large due to Intel's dominant position, and that $2 billion was "a big number, but a big number because Intel is the dominant company selling this infringing product" (via Bloomberg).

However, VLSI does not manufacture processors, and according to Bloomberg, the company's only potential revenue is from these three lawsuits. Intel has indicated that it intends to contest the previous verdict as well, and aims to appeal the original $2.18 billion verdict.

Meanwhile, Intel argues that the lawsuits prove that new laws are needed to "prevent these 'litigation investors' and their paper companies from using the low-quality patents they have purchased to extract exorbitant damages from productive American companies."

Stay tuned for round three, scheduled for June.