AWS could be potentially banned in Germany in patent fight with R2 Semiconductor
Amazon's (NASDAQ:AMZN) Amazon Web Services could be potentially banned in Germany in a patent fight with R2 Semiconductor, after the patent owner won a similar injunction against Intel (NASDAQ:INTC) earlier this year.
R2 Semiconductor, which is majority-owned by hedge funder Dan Loeb's Third Point Ventures, appears confident that it will also win an injunction against AWS as it's virtually the same patent issue as its fight with Intel (INTC). R2 filed the suit against AWS in March, and a decision isn't expected until next year.
“Until now we have been winning really each and every decision here," R2’s German lawyer, Volkmar Henke of Bardehle Pagenberg, said in an interview with Seeking Alpha last week. “At its core, the AWS lawsuit is the same as the Intel. The technical arguments are identical."
In February, a German court issued an injunction against the sale of some Intel chips, after ruling in favor of R2, which alleged Intel of infringing its patent related to voltage-regulating technology in chips. The injunction prevents Intel, Dell (DELL) and HP Inc. (HPQ) from the sale, manufacture or importation of any chips that use R2's technology. R2 hasn't enforced the injunction in Germany to date.
Intel said at the time that it was "disappointed" with the decision and planned to appeal.
AWS didn't respond to Seeking Alpha email request for comment, and an outside lawyer for Intel in London didn't respond to a request for comment.
“If Germany is just 1% of the global PC market, that’s still billions of dollars if R2 puts that injunction into place,” Tamlin Bason, an analyst at Bloomberg Intelligence said in a Bloomberg report published earlier this month. "But if you’re Dell, and you can’t sell laptops in Germany, so you miss your earnings estimates—I’d be very surprised if Intel wouldn’t settle prior to an injunction taking effect.”
The patent fight dates back to 2017 when R2 filed an unsuccessful lawsuit against Intel (INTC) in the U.S. alleging that the tech giant was using R2's proprietary technology in its products.
"We are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these lawsuits and the injunction and order of the Dusseldorf Regional Court due to the procedural posture and the nature of these cases, including that there are significant factual and legal issues to be resolved, and that uncertainty exists as to, among other things," Intel said in its latest 10-Q filing.
Intel in late March filed a suit in Italy to overturn a European patent owned by R2 Semiconductor which could block the tech giant from exporting some of its products to Germany.