SAN FRANCISCO (CN) - A federal judge Monday dismissed a securities class action against semiconductor developer Marvell Technology Group.
U.S. District Judge Lucy Koh granted Marvell's motion to dismiss the April 2014 lawsuit filed by lead plaintiff Lee Voss on behalf of company shareholders.
Koh found the plaintiffs did not satisfy requirements for bringing derivative claims under the laws of Bermuda, where Marvell is incorporated.
Koh also ruled that even if the plaintiffs could make a claim under Bermuda law, the shareholders' claimed injury was too speculative.
The lawsuit stems from a 2014 judgment of $1.5 billion against Marvell for a patent infringement against Carnegie Mellon University.
Marvell staff referred to their own chips as "coffee warmers" because of their ineffectiveness, and used Carnegie Mellon's technology without licensing it for nearly a decade, according to a Courthouse News report. The company sold more than 2 billion chips at a profit margin of more than $2 a chip using the university's technology.
Named as defendants in the shareholders' lawsuit were company founders Sehat and Pantas Sutardja, Sehat's wife Weili Dai, and several members of the company's board.
Voss et al. claimed the defendants made false and misleading statements to shareholders about the patent infringement and made money from revenue inflated by the scandal.
They also claimed that the huge judgment could make it difficult for the company to pay dividends to shareholders.
The company has continued to pay dividends to shareholders since the judgment, Koh noted in her order.
Contact Arvin Temkar at [email protected]
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