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Silicon Valley Patent Infringement Lawsuit Nets Carnegie Mellon University $750M

SANTA CLARA (CBS SF) -- Seven years after Carnegie Mellon University filed a patent infringement lawsuit against Santa Clara's Marvell Technology Group, the tech company agreed Wednesday to pay a $750 million settlement to the university.

After legal fees and related costs, the university officials said a "substantial share of the proceeds will go to the inventors" of the disputed technology, which university officials said had a "powerful impact" on the ability to more accurately detect the data stored in the disk drives of computers in the 1990s.

University officials said the inventors are José Moura, a professor in the university's Department of Electrical and Computer Engineering and Moura's former doctoral student Aleksandar Kavcic, who is now a professor of electrical and computer engineering at the University of Hawaii.

Carnegie Mellon University President Subra Suresh said, "We are pleased to honor the work of José and Alek, two inventors who provided a major step forward in computing technology, at a time when computing was transforming our world."

The university also released a statement from Moura on the invention.

"When the industry faced the inevitability of its own success, it needed a fundamentally new approach," Moura said. "Our solution could read back, with few errors, the enormous amount of data industry was packing in very small spaces. The rest is history."

Marvell Technology Group Ltd., and Marvell Semiconductor, Inc., while headquartered in the Bahamas, has operated out of Santa Clara since 1995.

Wednesday was not the company's first settlement.

In  2007, Marvell settled a $72 million shareholder class action lawsuit and in 2008, Marvell settled charges filed by the Securities and Exchange Commission alleging the company and executive Weili Dai reported false financial information to shareholders by backdating employee stock options to dates with lower stock prices.

Marvell and Dai settled the SEC's charges and paid financial penalties of $10 million and $500,000, respectively, according to SEC officials.

As a result of the alleged backdating scheme, SEC officials claim that from 2000 to 2006, Marvell overstated its income by $362 million.

By Hannah Albarazi - Follow her on Twitter

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