Just before Christmas the ITC gave Nvidia their second stinging defeat in their patent trolling rampage against Samsung. While this setback is not yet final, it is still the death knell for Nvidia’s moribund Tegra program.
Coming about a week after the final ruling that effectively crushed Nvidia’s offensive patent trolling campaign against Samsung, Qualcomm, and the rest of the industry, this new defeat is far more serious. Before we go on to that, lets recap a bit about what happened a week before this new ruling. In 2014 Nvidia filed an offensive patent action against Qualcomm and Samsung based on seven allegedly infringed patents. Last June they voluntarily pulled four of the seven patents from contention, a fact that was not deemed material enough for them to report on their blog as they only report ‘material’ items.
People far more versed in patent law than the author have said this was because they were about to be, “blown out of the water” and didn’t want to lose the patents. These actions validated the views of everyone polled by this publication when the actions were initiated. In mid-December there were two rulings that reiterated those views on the three patents not silently pulled. Some of those patents were declared invalid, some were declared non-infringed upon, and some were both non-infringed upon but also invalid, some totally while others only partially.
The ITC also effectively declared all three major mobile GPU architectures free from infringement which removes the overwhelming majority of mobile SoCs from any of Nvidia’s further trolling ambitions. When SemiAccurate said Nvidia was ‘devastated’ by the ITC ruling, were weren’t joking. Five and some of a sixth of the seven patents were functionally invalidated, the last was not not infringed upon as was one of the invalidated ones. The experts were dead on correct in 2014, the Nvidia patents were worthless as SemiAccurate has been saying for years.
While the news could hardly be worse for Nvidia, it still managed to become so on December 22nd. While details are between scarce and non-existent, a short ITC ruling came out saying that Nvidia had infringed upon three Samsung patents. This ruling is the first nail in Nvidia’s Tegra coffin and is based on a retaliatory action Samsung took when Nvidia first sued them for alleged patent infringement.
One thing to make note of, Nvidia has a long history of public bluster on, well, just about everything. From childishly attacking Intel with so called ‘political cartoons’ to their reaction when Samsung initiated their own patent actions, there is one clear theme. That would be Nvidia going on PR offensives whenever there is a question of their integrity or correctness, the company’s MO is to ‘make truth’ through public statements of questionable validity, then use them later as ‘fact’. This is done loudly, repeatedly, and through many proxy channels of ‘tame’ press.
Luckily for everyone involved, the US legal system does not seem to weight childish mocking cartoons and indignity in corporate blogs more heavily than actual evidence. As you can see Nvidia’s public bluster around their patent trolling actions ended with them losing about everything possible and then some, its magnitude was only matched by the volume of rhetoric. The same thing is happening with the Samsung action, lots of rhetoric about ‘valuable’ Nvidia patents and how their rights are being trampled by the Korean giant, with confident promises of victory on appeal, but no factual basis for hope that it will occur. Samsung and Qualcomm have for some reason remained silent, presented actual evidence, asserted valid patents, and trounced Nvidia on every count so far. With that track record you have to ask who the rhetoric is aimed at, and what its actual intention is, something SemiAccurate has been pointing out for quite a while now.
You may recall that this article was started with a statement about Nvidia’s mobile pretenses and their potentially dire future. If you look at SemiAccurate’s history on Nvidia’s patent trolling exercises dating back years, we were the lone voice that called it hollow from the beginning. Our track record has been nearly 100% accurate about the case, and this is based on weeks of research, interviews, and data, not summarizing cartoon laden blog posts. The one conclusion we reached long ago is that the public side of these so called ‘trolling actions’ have nothing to do with what is presented in the actions, they are based purely and entirely on executive pique. No we will not explain that in more detail.
Such actions tend to end predictably when set against real evidence and actual infringements, a strategy that we have seen repeatedly over the past several years. The Qualcomm and Samsung actions to date have had little effect on Nvidia’s bottom line, the non-public actions documented exclusively by SemiAccurate have already cost the company hundreds of millions of dollars in sales. If you look at Nvidia’s last quarterly call, you can see the direct effects on their OEM business like SemiAccurate predicted. But the worst is yet to come.
Note: The following is analysis for professional level subscribers only.
Disclosures: Charlie Demerjian and Stone Arch Networking Services, Inc. have no consulting relationships, investment relationships, or hold any investment positions with any of the companies mentioned in this report.