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Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc.

United States Court of Appeals for the Federal Circuit

July 3, 2018, Opinion Issued

2016-2691, 2017-1875

Opinion

 [***1123]  [*969]   DYK, Circuit Judge.

Power Integrations, Inc. owns U.S. Patent Nos. 6,212,079 ("the '079 patent") and 6,538,908 ("the '908 patent"). Power Integrations sued Fairchild Semiconductor Corporation and Fairchild (Taiwan) Corporation (collectively "Fairchild") for infringement. A jury found Fairchild literally infringed claims 31, 34, 38, and 42 of the '079 patent and infringed claims 26 and 27 of the '908 patent under the doctrine of equivalents. In a second trial, a jury awarded damages of roughly $140 million, finding that the entire market value rule applied [**2]  in calculating damages for infringement of the '079 patent. The district court denied Fairchild's motions for judgment as a matter of law. Fairchild appeals.

We affirm the district court's judgments of infringement. We conclude that the entire market value rule cannot be used here to calculate damages. We vacate the damages award and remand for further proceedings.

Background

Power Integrations and Fairchild are both manufacturers of power supply controller chips. Power supply controller chips are integrated circuits used in power supplies, such as chargers for electronic devices. These power supplies transform alternating current ("AC") electricity, which comes from an AC outlet, into direct current ("DC") electricity, which is needed to power cell phones, laptops, and other electronic devices.

After AC electricity has been converted to DC electricity, a switching regulator directs the transistor in the circuit when to turn on and off in order to provide the desired amount of power to the electronic device. The electronic device is referred to as the "DC output" because it receives the DC current. The transistor turns on and off at defined intervals. For example, if there is a need for power at [**3]  the DC output, the switching regulator will direct the transistor to stay "on" for a longer period of time so more power will flow to the DC output.

The controversy here involves the '079 and '908 patents owned by Power Integrations. The asserted claims of the '079 patent cover switching regulators. Prior-art switching regulators were inefficient during periods when the DC output required little power. During these low power periods, prior-art switching regulators would skip on/off cycles to decrease the DC power provided; the power remained off during the skipped cycle. However, skipping cycles created loud noise and delivered power in an intermittent fashion. The '079 patent addressed this problem by reducing the frequency of on/off cycles rather than by skipping cycles altogether. The frequency of on/off cycles is determined by feedback signals. Thus, the switching frequency varies based on the feedback signal. However, for a certain range of feedback signals, the frequency of the on/off cycles does not change. Each of the asserted claims requires a "fixed switching frequency for a first range of feedback signals."

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904 F.3d 965 *; 2018 U.S. App. LEXIS 26842 **; 128 U.S.P.Q.2D (BNA) 1121 ***; 2018 WL 4501536

POWER INTEGRATIONS, INC., Plaintiff-Appellee v. FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., FAIRCHILD SEMICONDUCTOR CORPORATION, FAIRCHILD (TAIWAN) CORPORATION, Defendants-Appellants

Subsequent History: OPINION MODIFIED: September 20, 2018. [**1] 1

Rehearing, en banc, denied by Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 2018 U.S. App. LEXIS 26837 (Fed. Cir., Sept. 20, 2018)

Prior History: Appeals from the United States District Court for the Northern District of California in No. 3:09-cv-05235-MMC, Judge Maxine M. Chesney.

Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 894 F.3d 1258, 2018 U.S. App. LEXIS 18177 (Fed. Cir., July 3, 2018)Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 2017 U.S. Dist. LEXIS 37956 (N.D. Cal., Mar. 10, 2017)

CORE TERMS

patent, frequency, switching, infringement, district court, products, features, damages, power supply, coupled, patentee, signal, feedback signal, market value, royalty, cycles, non-varying, estoppel, variation, terminal, asserted claim, matter of law, consumers, voltage, argues, doctrine of equivalents, consumer demand, prosecution-history, multi-function, parties

Patent Law, Infringement Actions, Claim Interpretation, Jurisdiction & Review, Standards of Review, De Novo Review, Clearly Erroneous Review, Prosecution History Estoppel, Damages, Patentholder Losses, Reasonable Royalties