IP Law Daily Fairchild denied JMOL, new trial, or reduction in jury’s $24M award to Power Integrations
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Wednesday, July 24, 2019

Fairchild denied JMOL, new trial, or reduction in jury’s $24M award to Power Integrations

By George Basharis, J.D.

In power supply controller chip dispute, jury’s patent infringement verdict and royalty award were supported by substantial evidence, although Power Integrations lost its bid for enhanced damages.

Power supply controller chip provider Fairchild Semiconductor International, Inc. failed to meet its burden of proof for judgment as a matter of law (JMOL) on patent infringement claims made by competitor Power Integrations, Inc., the U.S. District Court for the District of Delaware has determined. The court denied Fairchild’s motions for JMOL as to induced infringement and willful infringement and upheld the damages awarded to PI. While PI did not succeed in its claims for enhanced damages and attorney fees, the court awarded the company prejudgment interest (Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., July 22, 2019, Stark, L.).

The dispute involved technology related to controller chips for power supplies that are used to convert the high-voltage AC power supplied by the wall outlet into the low-voltage DC power required by various electronic devices. Power Integrations (PI) and defendants Fairchild (Fairchild Semiconductor International, Inc., Fairchild Semiconductor Corporation, and Fairchild (Taiwan) Corporation) filed post-trial motions after a November 2018 trial in which a jury found that Fairchild directly and indirectly infringed PI’s patents (the ’876 and ’851 patents) by inducing importation of its products by third parties, that the infringement was willful, and that $24,270.194.20 constituted reasonable royalty damages. Fairchild filed a motion to set aside the inducement and willful infringement verdicts, and for a new trial on inducement, and for a new trial on damages or, in the alternative, for remittitur. PI filed motions for enhanced damages, attorney fees, and pre- and post-judgment interest.

Inducement claims. Fairchild contended that JMOL or a new trial was appropriate because there was insufficient evidence to establish all elements of induced infringement as to any class of direct infringers. Although Fairchild argued that PI failed to measure actual importation of Fairchild’s products, the court found that PI presented sufficient evidence from which a reasonable jury could have found an importation rate of 30 to 33 percent. Three witnesses for PI provided testimony that could reasonably support the finding, the court noted. The court also found that PI presented sufficient evidence of Fairchild's affirmative acts directed toward a class of direct infringers by inducing third parties to import its products. Further, the jury instructions properly referred more broadly to "affirmative acts" toward the direct infringers. Fairchild's contention that PI failed to show that Fairchild caused approximately 269 million acts of importation did not have merit because it was not necessary for PI to directly link each affirmative act to direct infringement. It also was reasonable for a jury to determine that Fairchild’s affirmative acts had a last effect, the court found.

Damages or remittitur. Fairchild claimed that the jury’s award for damages was against the great weight of the evidence and, alternatively, should be remitted. Although the jury awarded damages greater than the amount requested by PI, the award was supported by the evidence, the court decided. As long as the jury awarded an amount "within the range encompassed by the record as a whole," it should be upheld. Fairchild also contended that the damages award should be remitted by 10.4 percent for sales that occurred after a June 30, 2014 injunction, because at that time Fairchild sent letters to its customers notifying them of the injunction. The court held that because the letters did not negate Fairchild’s affirmative acts during the design stage that led to direct infringement after the injunction, remitter was not appropriate.

Willful infringement. The court stated that Fairchild’s JMOL as to the willfulness verdict generally repeated the same arguments made as to the infringement verdict. There was sufficient evidence that Fairchild intended for its products to enter the United States knowing that the products infringed on PI’s patents, the court held.

Enhanced damages. The court did not agree with PI’s argument that it should be awarded treble damages because "this is likely the worst case of patent infringement that the Court will ever see." When damages resulting from patent infringement are found, a court may increase the damages up to three times the amount assessed (35 U.S.C. §284). In its determination of whether damages should be enhanced, the court applied Read factors: copying, good faith belief, and concealment. PI argued that the schematics for both parties' products were visually similar, but the court determined that such similarity was weak evidence of copying. Fairchild contended that it demonstrated a good faith belief in no induced infringement because of its lack of visibility into and control over its downstream supply chain. While visibility and control are not formal elements of inducement, they may be circumstantially relevant to intent. The court noted that although there was fact and expert testimony about the mostly overseas nature of Fairchild's business, there also was evidence that Fairchild intended for its products to reach the United States. The court also considered: litigation conduct; Fairchild’s size and financial condition; the duration of the infringement; Fairchild’s remedial actions; the closeness of the case; motivation for harm by Fairchild; and concealment. After evaluating the Read factors, the court held that an award for enhanced damages was unwarranted.

Attorney fees. PI did not show that the case was "exceptional" within the meaning of 35 U.S.C. Section 285, which provides that in exceptional patent cases, the court may award reasonable attorney fees to the prevailing party.

Interest. PI sought an award of prejudgment interest pursuant to 35 U.S.C. Section 284, which provides that prejudgment interest should normally be awarded in patent cases to provide patent owners with complete compensation. The court awarded PI $7,103,155.96 in prejudgment interest calculated in the manner of "the Court’s common practice." Fairchild’s request that the court use a lower rate was denied.

This case is No. 08-309-LPS.

Attorneys: Douglas E. McCann and Joseph B. Warden (Fish & Richardson PC) for Power Integrations, Inc. John G. Day and Andrew C. Mayo (Ashby & Geddes) for Fairchild Semiconductor International, Inc., Fairchild Semiconductor Corp. and Fairchild [Taiwan] Corp.

Companies: Power Integrations, Inc.; Fairchild Semiconductor International, Inc.; Fairchild Semiconductor Corp.; Fairchild [Taiwan] Corp.

MainStory: TopStory Patent DelawareNews

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