Third Point, an activist hedge fund owned by Dan Loeb, is backing small computer chip design company R2 Semiconductor in a significant patent battle against Intel. The dispute could potentially force Intel to stop selling certain chip lines in Europe. Third Point is funding the lawsuits against Intel, as well as new ones against Amazon Web Services and Fujitsu. R2 Semiconductor has sued Intel, Hewlett Packard Enterprise, and Dell in Germany for patent infringement related to voltage regulation in semiconductors. A regional court issued injunctions against the sale of some Intel chips, and a higher court upheld the decision. A trial in Britain over the patent is scheduled for next month. Third Point, which holds a majority stake in R2, is bearing the legal costs and plans to provide $79 million for escrow while the court battles in Germany continue.
Intel argues that the R2 patent applies to older generations of its chips, while R2 and Third Point claim it may also apply to current generations. Third Point aims to help R2’s founder, Dave Fisher, by seeking royalty payments from Intel if R2 wins the case. Intel has dismissed R2 as a “shell company” primarily engaged in litigation and pointed out that a different R2 patent was invalidated in the U.S.
Looking ahead, Germany’s patent court will make a final decision on R2’s claim in October. A victory for R2 could lead to a ban on affected Intel chips in Germany. R2 and Third Point are considering pursuing claims in the other 38 members of the European Patent Convention.
