Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-05235/USCOURTS-cand-3_09-cv-05235-104/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

POWER INTEGRATIONS, INC.,

Plaintiff,

 v.

FAIRCHILD SEMICONDUCTOR

INTERNATIONAL, INC. et al.,

Defendant. /

No. C 09-5235 MMC

ORDER GRANTING IN PART AND

DENYING IN PART FAIRCHILD’S

RENEWED MOTION FOR

RECONSIDERATION; SETTING

STATUS CONFERENCE

Before the Court is the “Renewed Motion for Reconsideration of Order Regarding

Fairchild’s Renewed Motion for Judgment as a Matter of Law, New Trial, and/or Remittitur,”

filed October 3, 2014, by defendants Fairchild Semiconductor International, Inc., Fairchild

Semiconductor Corporation, and System General Corporation (collectively “Fairchild”). 

Plaintiff Power Integrations, Inc. (“Power Integrations”) has filed opposition, to which

Fairchild has replied. The matter came before the Court for hearing on November 21,

2014. Frank Scherkenbach, Howard Pollack, and Michael Headley of Fish & Richardson

P.C. appeared on behalf of Power Integrations. Robert Walters, Christina Ondrick, and

Blair Jacobs of McDermott Will & Emery LLP appeared on behalf of Fairchild. The Court

having considered the parties' written submissions and the arguments of counsel, hereby

rules as follows.

At the outset, the Court finds Fairchild has shown good cause for reconsideration on

the issue of damages, given the Federal Circuit’s recent clarification of the law with respect

Case 3:09-cv-05235-MMC Document 666 Filed 11/25/14 Page 1 of 3
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to the calculation of a reasonable royalty. See Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d

1308 (Fed. Cir. 2014); see also Civil L.R. 7-9(a) (including among grounds for

reconsideration “a material difference in fact or law . . . from that which was presented to

the court”). The Court next turns to the merits of the motion.

As set forth in greater detail on the record at the hearing, Power Integrations’

damages expert, Jonathan Putnam, Ph.D. (“Dr. Putnam”), was obligated to apportion the

royalty solely to the patented features. See Virnetx, 767 F.3d at 1329 (holding "patentee's

obligation to apportion damages only to the patented features does not end with the

identification of the smallest salable unit if that unit still contains significant unpatented

features"); see also id. at 1326 (holding “patentee may assess damages based on the

entire market value of the accused product only where the patented feature creates the

basis for customer demand or substantially creates the value of the component parts”)

(emphasis in original) (internal quotation and citation omitted). 

Dr. Putnam expressly acknowledged his royalty calculation did not include such

apportionment (see Trial Trans. Vol. 4 at 1028:18-21 (A. "If you have got competitors where

the sale of the product causes the patentee to lose something . . . you don't apportion."); id.

at 1031:13-1032: ("[Q.] [Y]ou have a particular method for doing apportionment . . . but you

don't believe that this method would be appropriate to use in this case, is that right? A. No,

it's not.")), and Power Integrations expressly disclaimed any reliance on the entire market

value exception (see Opp’n at 6:3-4 (“Power Integrations did not rely on either the EMVR or

the entire value of Fairchild’s sales as a royalty base”); id. at 5:13-14 (“[m]oreover, the jury

in this case was not asked to apply the entire market value rule (EMVR)”)). 

Power Integrations’ argument that VirnetX does not require apportionment where the

expert calculates a royalty based on the “expected harm” to the patentee (see id. at 7:5-7)

overlooks the Federal Circuit’s clear directive therein that “[n]o matter what the form of the

royalty, a patentee must take care to seek only those damages attributable to the infringing

features,” VirnetX, 767 F.3d at 1326. 

Without the requisite apportionment, the jury lacked sufficient evidence on which to

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 Given the above, the Court does not address herein Fairchild’s argument

pertaining to Dr. Putnam’s use of the Lerner Markup Rule.

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base its damages award, and, consequently, a new trial on the issue of damages is

appropriate.1

 See Landes Const. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1372 (9th

Cir. 1987) (holding new trial should be granted where court “is left with the definite and firm

conviction that a mistake has been committed”).

Accordingly, to the extent Fairchild seeks a new trial on the issue of damages,

Fairchild’s motion for reconsideration is hereby GRANTED; in all other respects the motion

is hereby DENIED.

In light of the above, in addition to the hearing on pending post-trial motions,

scheduled for January 26, 2015, the Court will conduct a conference at which the parties

shall be prepared to provide a joint proposed schedule for the new trial.

IT IS SO ORDERED.

Dated: November 25, 2014 

MAXINE M. CHESNEY

United States District Judge

Case 3:09-cv-05235-MMC Document 666 Filed 11/25/14 Page 3 of 3