IP Law Daily Power supply chip patent case between Fairchild and Power Integrations remanded to district court
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Monday, December 12, 2016

Power supply chip patent case between Fairchild and Power Integrations remanded to district court

By Peter Reap, J.D., LL.M.

In a dispute between direct competitors in the power supply controller chip market Power Integrations and Fairchild Semiconductor International, Fairchild Semiconductor Corporation, and Fairchild (Taiwan) Corporation (collectively, "Fairchild"), the federal district court in Wilmington, Delaware’s lone finding of infringement against Power Integrations was reversed and the jury’s verdict that Fairchild induced the infringement of two of Power Integrations’ asserted patents has been vacated by the U.S. Court of Appeals for the Federal Circuit because of an improper jury instruction on induced infringement. In addition, several other issues were determined on appeal, and, with respect to permanent injunctions, the district court’s grant of Power Integrations’ motion for a permanent injunction was vacated. The denial of Fairchild’s motion for a permanent injunction was held to be moot in view of the appellate court’s rulings (Power Integrations. Inc. v. Fairchild Semiconductor International, Inc., December 12, 2016, Chen, R.).

Power supplies convert the high-voltage AC power supplied by the wall outlet into the low-voltage DC power required by the electronic device. The controller chip is the "brains" of the power supply. It ensures that the power supply functions properly. The patents at issue in this appeal relate to some of the features that have been incorporated into modern controller chips.

Power Integrations filed suit against Fairchild on May 23, 2008 in the District of Delaware alleging that Fairchild directly and indirectly infringed U.S. Patent Nos. 6,249,876 (the "’876 patent"), 6,107,851 (the "’851 patent"), and 7,110,270 (the "’270 patent"). Power Integrations subsequently amended its complaint to add allegations that Fairchild directly and indirectly infringed U.S. Patent No. 7,834,605 (the "’605 patent"). Fairchild filed counterclaims alleging that Power Integrations directly and indirectly infringed U.S. Patent No. 7,259,972 (the "’972 patent") and 7,352,595 (the "’595 patent").

Each party denied the infringement allegations made against it and alleged that all patents asserted against it were invalid and/or unenforceable. The district court bifurcated the liability and damages phases of the case prior to trial.

The jury found all claims asserted by Power Integrations not invalid. The jury found Fairchild liable for infringement of the ’876 patent and the ’851 patent. The jury found that Fairchild did not directly infringe or induce infringement of claims 1 or 2 of the ’605 patent or claims 6 or 7 of the ’270 patent.

Turning to Fairchild’s patents, the jury found all asserted claims not invalid. On infringement, the jury found for Fairchild under a single theory: Power Integrations infringed the asserted claims of the ’972 patent under the doctrine of equivalents. The jury found that Power Integrations did not literally infringe those claims nor did it induce others to infringe those claims. The jury found that Power Integrations did not infringe the asserted claims of the ’595 patent literally, under the doctrine of equivalents, or by inducement.

The district court granted Power Integrations’ motion for JMOL of direct infringement of the ’605 patent. It denied all other motions. Later, the court granted Power Integrations’ motion for a permanent injunction and enjoined "Fairchild from selling, offering to sell, and importing the products found at trial to infringe and those products ‘not colorably different’ from them." The district court denied Fairchild’s motion for a permanent injunction. Fairchild filed a timely appeal and Power Integrations cross-appealed.

The ‘851 and ‘876 Patents

Validity of the ’876 patent. The jury found that neither Martin nor Wang anticipated claims 1 and 21 of the ’876 patent. The ’876 patent claims a "frequency jittering" circuit used in switched-mode power supplies to reduce EMI emissions produced by the power supply.

The jury’s verdict was supported by substantial evidence, the appellate court held. As the district court correctly noted, Fairchild’s proposed calculation of Martin’s and Wang’s average frequency is done entirely "after the fact." Neither reference teaches use of a known target frequency about which switching frequencies are varied. Therefore, substantial evidence supports the jury’s findings that the references do not anticipate claim 1 or 21. The district court therefore correctly denied Fairchild’s JMOL motion.

Induced infringement of the ’851 and ’876 patents. The jury found that Fairchild’s SG5841J- and SG6842J-type products literally infringed claim 18 of the ’851 patent; its SG5841J-type products infringed claims 1 and 21 of the ’876 patent under the doctrine of equivalents; and its FAN103-type products literally infringed claims 1 and 21 of the ’876 patent. The jury further found that Fairchild induced others to infringe these claims. Fairchild only appealed the jury’s indirect infringement verdicts.

Fairchild argued that the verdict should be vacated because the jury was improperly instructed that Fairchild need not successfully induce a third party to infringe to be liable for induced infringement. The Federal Circuit agreed with Fairchild that the district court’s jury instruction misstated the law on induced infringement in a way that prejudiced Fairchild. It therefore vacated the jury’s verdict.

The jury instruction incorrectly stated that liability exists even where no inducement actually occurred. This is contrary to the law. Power Integrations’ claim for induced infringement was a close call. Therefore, the court could not say that the instruction did not tip the scales in favor of Power Integrations at trial and the jury’s verdict that Fairchild induced infringement of the ’851 and ’876 patents was vacated.

Power Integrations presented substantial evidence that Fairchild took affirmative acts to induce third parties to import its controller chips into the United States wherein—Fairchild did not seriously dispute—the chips necessarily infringed. While none of this evidence can be directly linked to the particular HP printer, Acer notebook computer, or Samsung notebook computer Power Integrations introduced at trial as representative acts of direct infringement, it was sufficient to allow the jury to find that Fairchild had induced its customers (including HP, Acer, and Samsung) to infringe as a class.

Because the evidentiary record permitted more than one reasonable finding on induced infringement, the appellate court could not say that, had the jury been instructed properly, the jury’s verdict would have lacked substantial supporting evidence. Therefore, the court did not enter judgment in favor of Fairchild.

The ‘605 patent

The jury’s verdict that Maige did not anticipate claims 1 and 2 of the ’605 patent was unsupported by substantial evidence. Thus, the jury’s verdict of no anticipation was reversed. As a result, Power Integrations’ cross-appeal was moot.

At trial, the parties disputed whether Maige discloses "a variable current limit threshold that increases during the on time of the switch." Fairchild presented the testimony of its expert, Dr. Gu-Yeon Wei, that Maige’s current threshold increased throughout the period of start-up—during which the device alternates between on and off states—and thereby satisfied the limitation. Power Integrations countered with the testimony of its own expert, Dr. Arthur Kelley. The jury sided with Power Integrations and found that Maige did not anticipate claims 1 and 2 of the ’605 patent.

Dr. Kelley testified at trial that (1) Maige’s current threshold increases "[d]uring the whole process of startup," and (2) Maige’s power supply is on "for some period of time" during startup. Taken together, Dr. Kelley’s testimony is a concession that Maige’s current threshold "increases during the on time of the switch." This is all that claims 1 and 2 require, according to the Federal Circuit. Thus, the jury’s verdict the jury’s verdict was not supported by substantial evidence.

The ‘972 Patent

The jury found that claims 6, 7, 18, and 19 were not invalid. It further found that Power Integrations infringed the claims under the doctrine of equivalents, but did not infringe literally and did not induce others to infringe. Fairchild appealed the jury’s verdict that Power Integrations did not induce infringement of the asserted claims. Power Integrations cross-appealed.

The district court’s claim construction and the jury’s verdict that claims 6, 7, 18, and 19 would not have been obvious were affirmed by the appellate court. The jury’s infringement verdicts vitiated the requirement that the claimed feedback signals be "distinct," according to the court. It therefore reversed the jury’s verdict that Power Integrations infringed claims 6, 7, 18, and 19 under the doctrine of equivalents. In view of these decisions, Fairchild’s appeal was moot.

Permanent Injunctions

Following trial, the district court granted Power Integrations’ motion for a permanent injunction and enjoined "Fairchild from selling, offering to sell, and importing the products found at trial to infringe and those products ‘not colorably different’ from them." The district court denied Fairchild’s motion for a permanent injunction. Fairchild appealed both of these rulings.

Fairchild’s appeal of the district court’s denial of Fairchild’s motion for a permanent injunction was moot, the court determined. The district court entered judgment of infringement against Power Integrations on the ’972 patent alone. The Federal Circuit reversed that judgment. Without a judgment of infringement by Power Integrations, issuance of a permanent injunction was not appropriate.

Turning to the district court’s grant of Power Integrations’ motion for a permanent injunction, that decision was vacated. As a result of the above holdings, only the district court’s judgment that Fairchild is liable for direct infringement of the ’851 and ’876 patents remained untouched. It was left to the district court to determine in the first instance if a permanent injunction is appropriate.

The case is Nos. 2015-1329 and 2015-1388.

Attorneys: Frank E. Scherkenbach (Fish & Richardson, P.C.) for Power Integrations, Inc. Blair M. Jacobs (Paul Hastings LLP) for Fairchild Semiconductor International, Inc., Fairchild Semiconductor Corporation, and Fairchild [Taiwan] Corporation.

Companies: Power Integrations, Inc.; Fairchild Semiconductor International, Inc.; Fairchild Semiconductor Corporation; Fairchild (Taiwan) Corporation

MainStory: TopStory Patent TechnologyInternet FedCirNews

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