A jury in Pittsburgh found the firm guilty of infringing two hard disk innovations owned by local university Carnegie Mellon.
Despite Marvel claiming that the CMU patents weren't valid because they hadn't invented anything new, citing that a Seagate patent. 14 months earlier described everything the CMU patents claimed, the jury found that Marvell's chips infringed claim 4 of Patent No. 6,201,839 and claim 2 of Patent No. 6,438,180. "method and apparatus for correlation-sensitive adaptive sequence detection" and "soft and hard sequence detection in ISI memory channels."
It said Marvell should pay $1.17bn (£723m) in compensation — however that sum could be multiplied up to three times by the judge because the jury had also said the act had been "wilful".
Marvell's shares fell more than 10%.
The maximum penalty would be close to the $3.96bn value of the company, based on its market capitalisation.
Marvell makes a range of chips which includes processors which power devices including Blackberry smartphones, Sony Google TV internet video boxes and LED lighting controllers, as well as hard disks.