# United States **Court of Appeals**  **for the Federal Circuit**

______________________ POWER INTEGRATIONS, INC., Plaintiff

- Appellee

v.

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., FAIRCHILD SEMICONDUCTOR CORPORATION, FAIRCHI LD (TAIWAN) CORPORATION, Defendants

- Appellants

______________________

2016

- 2691, 2017

- 1875

______________________ Appeals from the United States District Court for the Northern District of California in No. 3:09

- cv

- 05235

- MMC, Judge Maxine M. Chesney.

______________________

Decided: July 3 , 2018

______________________
F RANK S CHERKENBACH , Fish & Richardson, PC, Boston, MA, argued for plaintiff

- appellee. Also represen ted by C RAIG E. C OUNTRYMAN , J OHN W INSTON T HORNBURGH , San Diego, CA; M ICHAEL R. H EADLEY , H OWARD G. P OLLACK , Redwood City, CA.

K ATHLEEN M. S ULLIVAN , Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for defendants

appellants. Also represented by J OSHUA L. S OHN , Was h-POWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 2

ington, DC; K EVIN A LEXANDER S MITH , San Francisco, CA; B LAIR M ARTIN J ACOBS , S TEPHEN B LAKE K INNAIRD , C HRISTINA A NN O NDRICK , P ATRICK S TAFFORD , Paul Ha stings LLP, Washington, DC.

______________________
Before D YK , C LEVENGER , and C HEN , Circuit Judges.

D YK , 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 su ed Fairchild Semicondu ctor Corporation and Fairchild (Taiwan) Corporation (collectively “Fairchild”) for in fringement . A ju ry 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 e nt ire m arket v alue r ule applied in calculating damages for infringement of the ’ 079 pat ent . The district court denied Fairchild’s motions for judgment as a matter of law . Fairchild appeals.

We affirm the district court’s judgments of infring ement. We conclude that the e ntire m arket v alue r ule cannot be used here to calculate damages. W e vacate the damages award and remand for further proceedings

. B ACKGROUND

I Power Integrations and Fairchild are both manufa cturers 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 directPOWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 3

current (“DC”) electricity, which is needed to power cell phones, laptops, and other electronic devices. After AC electricity has been converted to DC electri city, 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 . T he 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 a t 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 p atents 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 b y skippin g 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 t he asserted claims requires a “ fixed switching frequency for a first range of feedback signals. ”

The ’ 908 patent covers a “power supply controller,” which is an integrated circuit that can perform a variety of power

- regulation functions. ’908 pat., col. 1, ll. 32

– 33, 52

– 60. Each of the asserted claims requires a power supply controller comprising “a multi

- function circuitPOWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 4

coupled to receive a signal at a multi

- function terminal for adjusting a current limit of a power switch. ” Id ., col. 25, l. 63

– col. 26, l. 14. The current limit is a value of current that can be used by the circuit to turn off the power switch when the amount of current passing through the power switch reaches the threshold value.

II Power Integrations filed suit agains t Fairchild, alle ging infringement of various claims of the ’079 patent and the ’908 patent. 1 In February and March 2014, the district court held a sixteen

- day jury trial. The 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. 2 The jur y awarded Power Integrations $1 05 million in reasonable royalty damages

. Fairchild sought judgment as a matter of law that it did not infringe claims of the ’079 or ’908 patents , or in the alternative a new trial, which the district court denied.

1 Fairchild counterclaimed for infringement of U.S. Patent No. 5,747,977. The jury found that Power Integr ations did not infringe this patent, and the district court entered judgment consistent with the jury verdict. This aspect of the judgment has not been appealed.

2 All of the asserted claims in this proceeding have been found unpatentable in two IPR proce edings. Those proceedings are currently pending on appeal to this court. See Semiconductor Components Indus., LLC v. Power Integrations, Inc. , IPR No. 2016

- 00809 (P.T.A.B. Dec. 22, 2017), appeal filed No. 18

- 1607 (Fed. Cir. Feb. 26, 2018); Semiconductor Components Indus., LLC v. Power Integr ations, Inc. , IPR No. 2016

- 00995 (P.T.A.B. Dec. 21, 2017), appeal filed No. 18

- 1602 (Fed. Cir. Feb. 23, 2018).POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 5

Six months after the jury verdict

, and while the case was still pending in the district court, our court decided VirnetX, Inc. v. Cisco Systems, Inc.
, 767 F.3d 1308 , 1329 (Fed. Cir. 2014), which concerned the general rule that a patentee seeking damages based on an infringing product with both patented and unpatented features must “appo rtion damages only to the patented features .” VirnetX explained that simply identifying the smallest salable unit is not necessarily sufficient to satisfy a patentee’s obligation to apportion for multi

- component products with significant unpatented features

. Id. Because Power Int egrations’ royalty calcula tion in the f irst trial did not apportion beyond the “smallest salable unit” and Power Integrations had disclaimed reliance on the e ntire m arket

v alue r ule, the district court granted a new trial on the issue of damages in light of VirnetX

. The district court held a second damages trial in D ecember 2015. The district court granted a Daubert motion to exclude Power Integrations’ expert testimony based on apportionment

, but allowed its expert to present testim ony based on the e ntire m arket v alue r ule. The jury awarded $139.8 million in damages, based on damages testimony that relied solely on the e ntire m arket v alue

r ule

. Fairchild then moved for judgment as a matter of law, or in the alternative a new trial, arguing that the damages award was not supported by substantial ev idence and that the use of the e ntire m arket v alue r ule was improper. The district court denied this motion.
Fairchild now appeals the determination of literal i nfringement of the ’079 patent, the determination of i nfringement under doctrine of equivalents of the ’908 patent, and the damages award. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).POWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 6

D ISCUSSION

I We first address infringement of the ’079 patent. The key issue here is whether the accused products ha ve a “fixed switching frequency for a first range of feedback signal values .” 3 On appeal, Fairchild does not dispute that

3 Claim 31, which is representative, reads in full: 31. A switching regulator, comprising: a power switch c oupled between first and second term inals, the first terminal to be coupled to an energy transfer element of a power supply and the second terminal to be coupled to a supply rail of the po wer supply, and a control circuit coupled to a third terminal and t he power Switch, the third terminal to be coupled to an output of the power supply, the control ci rcuit coupled to generate a feedback signal respo nsive to the output of the power supply, the control circuit coupled to switch the power switch in r esponse t o the feedback signal, the control circuit coupled to switch the power switch at a fixed switching frequency for a first range of feedback signal values, the control circuit coupled to vary a switching frequency of the power switch without skipping cycles in response to the feedback signal for a second range of feedback signal values, wherein the control circuit comprises: a feedback signal circuit coupled to the third te rminal, the feedback signal circuit coupled to ge nerate the feedback signal; and

a pulse width modulator circuit coupled to switch the power switch in response to the feedback si gnal,POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 7

the other claim limitations were satisfied. The jury found that all accused products infringed the asserted claims, and the district court denied judgment as a matter of law of no infringement. We review the denial of a motion for judgment as a matter of law de novo. We review a jury determination of infringement for substantial evidence.

In a Markman order, the district court construed “fixed switching frequency” to mean “ [a] non

- varying number of switching cycles per second.” J.A. 2142. On appeal, Fairchild disputes: (1) whether all accused pro ducts include a “fixed” switching frequency because the frequency varies due to operating conditions

, and (2) whether a particular subset of accused products, known as “frequency

- hopping” products, has a “fixed” frequency. This second issue turns primarily on claim construction

— whether the district court properly co nstrued “fixed frequency” to include a per second limit ation . But Fairchild contends that even if the claim construction were correct, there was not substantial evidence to support the jury verdict

. Claim terms are given their ordinary and customary meaning, which is the meaning the term would have to a person of ordinary skill in the art at the time of the inve ntion. Phillips v. AWH Corp. , 415 F.3d 1303, 1312

– 13 (Fed. Cir. 2005) (en banc) . We review claim construction de novo, except for subsidiary facts based on extrinsic ev i-

wherein the first and second ranges of the fee dback signal correspond to first and second ranges of on

- time values of a drive signal generated by the puls e width modulator circuit to switch the power switch. ’079 patent, Ex Parte Reexaminati on Certificate, col. 2, ll. 4– 32

.POWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 8

dence, which we review for clear error. Teva Pharms. USA, Inc. v. Sandoz, Inc. , 135 S. Ct. 831, 841 (2015).

A
Fairchild argues that the jury verdict is not supported by substantial evidence because none of the Fairchild products has a “fixed switching frequency ” according to the language of the claims or a “non

- varying frequency” under the district court’s claim construction

, because even during “fixed” frequency mode, the products operate with 5% to 15% variance in frequency. This variance is due to operating conditions, such as temperature and input voltage. The question is whether this variability renders the products non

- infringing.
Fairchild argues that the term “fixed” under the di strict court’s construction of “non

- varying number of switching cycles per second” requires an absolutely fixed frequency with no variance

, even due to operating cond itions

. The district court, Fairchild asserts, rejected a construction of “fixed” frequency that permits natural variation when it rejected Power Integration’s proposed

cons truction of “fixed switching frequency” as “the target switching frequency is intended to be substantially fixed.” J.A. 2125. Rather, the court adopted “fixed” as meaning “non

- varying.” J.A. 2142. 4

4 Fairchild also argues that the term “fixed” cannot include any variations due to operating conditions based

on statements made by Power Integrations du ring the reexamination about a particular prior art reference, the Zhou reference. However, this argument is waived b ecause Fairchild did not raise the prosecution history concerning the Zhou prior art as a claim co nstruction argument before the district court. Moreover, the Zhou reference did not disclose holding frequency constant overPOWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 9

Fairchild’s argument is unpersuasive. The district court’ s construction of “fixed switch ing frequency” as “non

- varying” does not exclude the possibility of natural variation because doing so would impermissibly render the claims inoperable. See Ecolabs, Inc. v. FMC Corp. , 569 F.3d 1335, 1345 (Fed. Cir. 2009) (fi nding that where claim language permits an operable construction, the inoperable construction is wrong). 5 Here, the parties offered expert testimony to address the knowledge of persons of ordinary skill in the art. The expert testimony demonstrated that

no real

- world power supply controllers could operate with an absolutely fixed , or non

- varying, frequency. Indeed, Fairchild seems to concede that there is always some variation in frequency due to operating conditions

. Mor eover, technical marketing documents from products sold by Fairchild

, Power Integrations , and third parties label these controllers as “fixed frequency” products despite the undisputed, minor variations in frequency. Since the term “fixed” is not unambiguously defined in the claims, the fact that power supply controllers cannot operate without any variation supports that the plain and ordinary mea ning of “fixed” encompasses minor environmental vari ations.

a range of feedback signals but instead varied frequency over the entire range of operation. Therefore, the prosec ution history sta tement describing Zhou as not containing a “fixed” frequency was not directed to determining whether the switching frequency has been fixed when environmental variations occur while holding a fixed frequency over a certain range of signals.

5 This case is unlike that in Chef America, Inc. v. Lamb

- Weston, Inc. , where the claims were unambiguously written in a manner that rendered them inoperable. 359 F.3d 1371, 1374 (Fed. Cir. 2004).POWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 10

Thus, the jury could have properly conclude d that the terms “fixed frequency” and “non -v arying” left open the possibility for minor frequency variations due to operating conditions. A reasonable jury could have found that the accused products have a “fixed” or “non

- varying” freque ncy despite slight variance due to operating condi t ions

. B
Fairchild alternatively argues that there was no basis for finding that the “fixed” frequency limitation was satisfied for a subset of the accused products because the Fairchild “f requency

- hopping” products intentionally vary frequency in order to reduce e lectromagnetic interference. The intentional varying of frequency is referred to as “jittering.” For example, one Fairchild frequency

- hopping product jittered its switching frequency from 62 kilohertz to 68 kilohertz, around a center frequency of 65 kilohe rtz. E ven though the frequency varies in any given microse cond interval, the average number of cycles per second is 65,000. On appeal, Fairchild argues that the district court erred in construing “fixed switching frequency” as a “non

varying number of swi tching cycles per second ” rather than looking to overall variation

. The district court construed claim terms in a series of Markman orders in 2011 and 2012

— two years before trial. Power Integrations proposed that “fixed switching frequency” be construed to mean “the target switching frequency is intended to be substantially fixed; but does not preclude the presence of a frequency jittering circuit.” J.A. 2125. Fairchild proposed that : “the switching fr equency does not vary.” Id. The district court then co nstrued the term to mean a “non

- varying number of switching cycles per second,” even though neither party requested the “per second” limitation. J.A. 2142.POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 11

Although Fairchild later proposed further constru ction for other claim terms, Fairchild never objec ted to the “per second” construction and did not seek rehearing or supplemental construction. At trial, Fairchild did not object to the district court ’s instructing the jury using the “per second” language

. Even in its post

- trial motion, Fairchild did not argue that the court’s construction was incorrect

. The claim construction issue is argued for the first time on appeal.
Power Integrations argues that because Fairchild did not seek additional claim construction at the district court and chose to litigate this issue as a factual dispute about infringement , Fairchild has waived its “ per second” claim construction argument. Fairchild responds that it did not waive its claim construction argument because the claim construction it proposes now is the same as t he claim construction it proposed during the Markman hearing, which did not contain the “per second” limitation.

We have held that a party does not waive a claim co nstruction argument by failing to object during trial when the construction proposed on app eal is the same as the construction proposed in a Markman hearing. O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co. , 521 F.3d 1351, 1359 (Fed. Cir. 2008) ; see also D’Agostino v. Mastercard Int’l Inc. , 844 F.3d 945, 950 (Fed. Cir. 2016); In re Pabst Licensing Dig. Camera Patent Litig. , 778 F.3d 1255, 1266 (Fed. Cir. 2015)

. “When the claim construction is resolve d
pre

- trial, and the patentee presented the same position in the Markman proceeding as is now pressed, a further objection to the district court’s pre

- trial ruling may indeed have been not only futile, but unnecessary.” Cardiac Pacemakers, Inc. v. St. Jude Med.

, Inc. , 381 F.3d 1371, 1381 (Fed. Cir. 2004). However, this rule only applies when “issues were fully litigated and decided a t the Markman stage of the litigation.” O2 Micro , 521 F.3d at 1359.POWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 12

The problem for Fairchild is that the issue of the a ppropriate time interval over which to measure frequency
was not fully litigated

— or even raised as an issue in dispute

— at the Markman stage of this proceeding. Du ring the Markman proceedings, t here was no dispute about the time interval. Neither Fairchild nor Power Integr ations proposed a construction with the “per second” lim itation. The district court added this limitation to the
const ruction on its own without providing a clear explan ation

. Because the district court had not specifically a ddressed this issue in its claim construction order, in order to preserve an objection to the district court’s claim co nstruction, Fairchild was requ ired to raise the issue before submission to the jury. Yet even when this dispute arose at trial, Fairchild did not ask the district court to modify or clarify its claim construction with regard to “per se cond,” nor did it object to the jury instructions. Instead, Fairchild waited until this appeal to argue that the di strict court’s claim construction was erroneous.

It is well

- settled that a p arty cannot reserve a new claim

- construction argument for the post

- trial motion stage of litigation. Lazare Kaplan Int’l, Inc. v. Photoscribe Techs

. , Inc. , 628 F.3d 1359, 1376 (Fed. Cir. 2010); Broadcom Corp. v. Qualcomm Inc. , 543 F.3d 683, 694 (Fed. Cir. 2008); Hewlett

- Packard Co. v. Mustek Sys., Inc.

, 340 F.3d 1314 , 1320 (Fed. Cir. 2003).
The present situation is similar to Solvay S.A. v. Ho ney well International , Inc. , 742 F.3d 998 (Fed. Cir. 2014)

. In that case, the district court construed a claim term “isolating” to require removing two chemicals, HFC

- 245fa and HCl, from a chemical react ion

. Id. at 1003. During claim construction, the parties did not raise and the district court did not address the issue of whether the two chemicals could return to the reactor after initially being removed. Id. at 1003

– 04. However, during the trial, a dis agreement arose between the parties as to whether thePOWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 13

chemicals had to be permanently removed. The parties argued the issue at trial, and the district court allowed jury instructions that did not necessarily require perm anent removal. Id. at 1004. When the patentee argued on appeal that the proper claim construction required the chemicals to be permanently removed, we held that “[b]ecause [the patentee] failed to object to the court’s construction or jury instruction with respect to the term ‘isolating,’ it waived the issue and cannot now raise novel arguments to r edefine the scope of [the ] claim. ” Id. In particular, we noted that the patentee “did not ask the district court to modify the claim construction or acco mpanying jury instruction .” Id. By failing e ither to request that the district court modify or clarify its claim constru ction earlier in the litigation proceedings or to object to the jury instructions , Fair child has waived this new claim

construction argument.

Because Fairchild has waived its “per second” claim

construction objection, we only review whether substa ntial evidence supported the jury verdict under the court’s construction

. See Lazare , 628 F.3d at 1376; Hewlett

Packard , 340 F.3d at 1320

. Power Integrations’ expert, Dr. Kelley, testi fied that the accused products operate with a non

- varying number of cycles per second for a range of operation. Dr. Kelley testified that the frequency

hopping products meet the limitation of a “non

- varying number of switching cycles per second ” because even though the frequency varies over microsecond intervals, the aggregate number of pulses would not vary over each

one

- second interval. Based on this testimony, a reason able jury could have concluded that the accused products operate with a “fi xed switching frequency” for a certain range of feedback signals under the district court’s co nstruction. Thus, s ubstantial evidence supports the jury’s verdict of infringement of the ’079 patent for all of the accused products.POWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 14

II
Next, we address infrin gement of the ’908 patent u nder the doctrine of equivalents. The ’908 patent is directed towards a power supply controller, where an integrated circuit can perform multiple functions within a single terminal. Claim 26 requires: 26. A power supply controller circuit, comprising:

a multi

- function circuit coupled to receive a signal at a multi

- function terminal for adjusting a cu rrent limit of a power switch , the multi

- function circuit to generate a current limit adjustment si gnal in response to the signal; and a control circuit coupled to receive the current li mit adjustment signal, the control circuit coupled to adjust the current limit of a current through the power switch in response to the current limit a djustment signal.

’ 908 patent , col. 25 l. 63

– col. 26, l. 7 (emphasis added)

. Claim 27, the only other asserted claim, d epends from claim 26. The dispute focuses on the “current limit” term. There is no dispute about claim construction. The district court construed “current limit” as “a value of current that can be used by the control circuit to turn off the power switch when the amount of current passing through the power switch reaches the threshold.” J.A. 2155.
The accused products us e a value of voltage, rather than a value of current, as the signal to implement the current limit , so there could not be literal infringement of this limitation

. Fairchild moved in limine to preclude Power Integrations from arguing infringement under the doctrine of equivalents based o n prosecution

- history estoppel. Fairchild argued that prosecution

- history esto ppel existed because during prosecution of a related patent,POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 15

Power Integrations explicitly distinguished voltage from current and therefore could n ot now assert voltage as an equivalent. The district court denied the motion in limine because the prosecution history was for a different term in a different patent , allowing Power Integrations to argue voltage as an equivalent for monitoring current.

At trial, Power Integrations’ expert testified that a value of voltage qualifies as a “value of current” because under Ohm’s Law, current is equal to voltage divided by resistance. J.A. 572

– 73 , 901

. The jury then found i nfringement under the doctrine of equi valents, and the district court denied judgment as a matter of law. On appeal, Fairchild argues that Power Integrations’ equiv alents theory is barred by prosecution

- history estoppel.

Prosecution- history estoppel limits the application of the doctrine of equivalents. If a patentee surrenders certain subject matter during prosecution, the patentee is then barred from using the doctrine of equivalents to recover for infringement based on that same subject
matter. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushik i Co.

, 535 U.S. 722, 733

– 34 (2002). Prosecution- history estoppel can occur either when the patentee makes a narrowing amendment to the claim or surrenders claim scope through argument to the patent examiner. Conoco, Inc. v. Energy & Envtl. Int’l, L.C. , 460 F.3d 1349, 1363 (Fed. Cir. 2006). Here there was no claim amendment, so Fairchild relies on argument

- based estoppel. To invoke argument

- based estoppel, the prosecution history must evince a “clear and unmistakable surrender of the subject matter.” Id . at 1364

. The application of prosecution

history estoppel is a question of law that we review de

novo. Intendis GMBH v

. Glenmark Pharm . Inc., USA , 822 F.3d 1355, 1365 (Fed. Cir. 2016).
Fairchild argues for argument

- based estoppel based

on a statement that Pow er Integrations made duringPOWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 16

prosecution of U.S. Patent No. 6,462,971 ( “ the ’971 p atent ” ), which is the parent to the ’908 patent and sha res a specification. The relevant claim of the ’971 patent is directed to : [a] power supply controller circuit, comprising a current input circuit coupled to receive a current representative of an input voltage , the current i nput circuit to generate an enable/disable signal when the current crosses a threshold having a hysteresis of greater than or equal to zero, the power supply controller to activate and deactivate the power supply in response to the enable/disable signal.
’971 pat., col. 23, ll. 30

– 36 (emphasis added)

. The examiner rejected the claims based on the Agiman referenc e. In an effort to overcome the rejection, Power Integrations argued that “Agiman’s circuit mon itors voltage rather than current.” J.A. 2283 (emphasis in original)

. Power Integrations then urged that “Agiman fails to disclose . . . a current input circuit coupled to receive a current representative of an input voltage, the current input circuit to generate an enable/disable signal when the current crosses a thresh old .” Id. (emphas e s in original). Fairchild argues that this distinction also a pplies to the “c urrent limit” term of the ’908 patent.

T o determine whether prosecution

- history estoppel applies

, “ the relevant inquiry is whether a competitor would reasonably believe that the applicant surrendered the relevant subject matter. ” Conoco , 460 F.3d at 1364 (quoting Cybor Corp. v. FAS Techs., Inc. , 138 F.3d 1448, 1457 (Fed. Cir. 1998)

, abrogated on other grounds by Teva Pharms. USA, Inc. v. Sandoz, Inc. , 789 F.3d 1335 (Fed. Cir. 2015 ). When considering the prosecution history of a parent application to construe claim terms, we consider differences in the language and context of differentPOWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 17

claims

. See Abtox, Inc. v. Exitron Corp. , 122 F.3d 1019, 1027 (Fed. Cir. 1997) (“[S]tatements in the parent appl ication must be confined to their proper context and properly acknowledge the distinctions between

. . . [the] claims.”)

. Here, th e claim language on its face is different than the language of the claims to which the prosecution argument was directed . Claim 26 of the ’908 patent covers “a multi

- function circuit coupl ed to receive a signal at a multi

- function terminal for adjusting a current limit of a power switch, the multi

- function circuit to generate a current limit adjustment signal in response to the signal.” ’908 pat

. , col. 25 l. 63

– col. 26, l. 7 (emphasis added )

. The current limit in the ’908 patent is externally adjustable and helps prevent a power switch from overloading due to excessive current flow. The ’971 patent, on the other hand, claims a “ current input circuit coupled to receive a current representativ e of an input voltage , the current input circuit to generate an enable/disable signal when the current crosses a threshold .” ’971 pat., col. 23, ll. 30

– 33 (emphasis added)

. The function s performed in the two patents are related but differ ent. The ’908 patent claims receiving a signal to adjust the current limit, which in turn determines when to turn the power supply on and off. T he ’971 patent claims receiving a signal that directly turns the power supply on and off. I mportantly, the claim in the ’971 p atent specifically distinguishes voltage from current, claiming “a current representative of an input voltage.” The ’908 claim, in contrast, does not distinguish between current and voltage within the claim. It merely describes a “signal” to adjust the cur rent limit. On appeal, Fairchild provides only a cursory arg ument of why the statement in the ’971 patent prosecution history should apply the embodiments claimed in the ’908 patent

. Fairchild failed to establish that the prosecution history is sufficientl y clear as to create an estoppel. W ePOWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 18

conclude that the district court correc tly determined that prosecution -h istory estoppel does not apply, and affirm the finding of infringement as to the asserted claims of the ’908 patent.

III
Lastly, we address damages. The jury awarded Power Integration s $139.8 million in the form of a reasonable royal ty . The jury’s reasonable royalty covered the three types of losses Power Integration s’ damages expert Dr. Putnam testified the parties would anticipate during a hypothetical negotiation: lost sales, reduction in price due to competition, and lost licensing fees. The district court denied Fairchild’s motion for judgment as a matter of law or in the alternative a new trial with respect to damages. We agree with Fai rchild that the district court should have granted the new trial motion. A patentee is only entitled to a reasonable royalty a ttributable to the infringing features. The patentee “must in every case give evidence tending to separate or appo rtion the def endant’s profits and the patentee’s damages between the patented feature and the unpatented fe atures.” Garretson v. Clark , 111 U.S. 120, 121 (1884). In accordance with Garretson , we have required that roya lties be apportioned between the infringing and n oninfringing features of the product. Ericsson, Inc. v. D

- Link Sys., Inc. , 773 F.3d 1201, 1226

– 27 (Fed. Cir. 2014); VirnetX , 767 F.3d at 1326; Uniloc USA, Inc. v. Microsoft Corp. , 632 F.3d 1292, 1318 (Fed. Cir. 2011); Lucent Techs., Inc. v. Gateway, Inc.

, 580 F.3d 1301, 1336

– 37 (Fed. Cir. 2009). “As a substantive matter, it is the ‘value of what was taken’ that measures a ‘reasonable r oyalty’ under 35 U.S.C. § 284. ” Ericsson , 773 F.3d at 12 2 6 ( quo ting Dowagiac Mfg. v. Minn. Moline Plow Co. , 235 U.S. 641, 648 ( 1915) ) . And in the context of a utility patent, it is only the patented technology that is taken from thePOWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 19

owner, so the value to be determined is only the value that the infringing f eatures contribute to the value of an accused product. Id

. Undertak ing an apportionment analysis where re asonable royalties are sought generally requires a dete rmination of the royalty base to which the royalty rate will be applied. W e have articulated that , where multi

component products are accused of infringement, the royalty base should not be larger than the smallest sal able unit embodying the patented invention. We have

cau tioned against reliance on use of the entire market value of a multi

- component product that includes a p atented component because it “cannot h elp but skew the damages horizon for the jury, regardless of the contrib ution of the patented component to this revenue.” Uniloc

, 632 F.3d at 1320. “Where small elements of multi

component products are accused of infringement, calcula ting a royalty on the entire product carries a considerable risk that the patentee will be improperly compensated for

non

- infringing components of that product.” Laser D

yna mics
, 694 F.3d at 67. Admission of evidence of the entire market value “only serve[s] to make a patentee’s proffered damages amount appear modest by comparison, and to artificially inflate the jury’s damages calculation beyond that which is ‘adequate to compensate for the infring ement.’” Id. at 68 ( quoting 35 U.S.C. § 284). E ven when a damages theory relies on the smallest salable unit as the basis for calculating the royalty , the patentee must est imate what portion of that smallest salable unit is a ttributable to the patented technology when the smallest salable unit itself contain s several non

- infringing fe atu res. VirnetX , 767 F.3d at 1327. The damages verdict here rests on Power Integr ations ’ reliance on a demanding alternative to our general rule of apportionment, the e ntire m arket v alue r ule

. Id

. “The entire market value rule allows for the recovery ofPOWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 20

damages based on the value of an entire apparatus co ntaining several features, when the feature patented constitutes the basis for consumer demand.” Lucent Techs., Inc. v. Gateway, Inc. , 580 F.3d 1301, 1336 (Fed. Cir. 2009) ; see also Rite

- Hite Corp. v. Ke lley Co. , 36 F.3d 1538, 1549 (Fed. Cir. 1995) (en banc) . As we have e xplained, “[t]he law requires patentees to apportion the royalty down to a reasonable estimate of the value of its claimed technology, ” unless it can “ establish that its patented technol ogy drove demand for the entire product.” VirnetX , 767 F.3d at 1329. “[S]trict requirements limiting the entire market value exception ensure that a reason able royalty ‘does not overreach and encompass comp onents not covered by the patent.’” Id. at 1326 ( quoting LaserDynamics , 694 F.3d at 70).
If the product has other valuable features that also contribute to driving consumer demand

— patented or unpatented

— the n the damages for patent infringement must be apportioned to reflect only the value of the p atent ed feature. This is so whenever the claimed feature does not define the entirety of the commercial product. In some circumstances, for example, where the other fe atures are simply generic and/or conventional and hence of little distinguishing character

, it may be appropriate to use the entire value of the product because the patented feature accounts for almost all of the value of the product as a whole. See AstraZeneca AB v. Apotex Corp. , 782 F.3d 1324, 1338

– 40 (Fed. Cir. 2015).
Power Integrations ’ royalty rate is premised on the ’079 patent’s frequency reduction feature as driving consumer demand for Fairchild’s controller chips. To support this contention, Power Integrations provided evidence that the ’079 patented frequency reduction feature was essential to many customers, as it allowed the products to meet the f ederal government’s Energy Star
program

. In addition, Power Integrations provided ev i-POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 21

dence that some customers asked for the ’079 feature, that products with the ’079 feature outsold other pro ducts, and that technical marketing materials promoted the ’079 feature. Both parties , however, agreed that the accused products contained other valuable features as well. Power Integrations presented no evidence about the effect of those features o n consumer demand or the extent to which those features were responsible for the products’ value

. Power Integrations did not seek a separate jury determination as to damages for infringement of the asserted claims of the ’908 patent, and it is clear that t he jury calculated damages only for the ’079 patent.
In its JMOL motion, Fairchild argued that the ev idence presented by Power Integrations was insufficient as a matter of law to invoke the e ntire m arket v alue r ule, pointing to our decision in Laser D

ynami cs . The district court noted that three prior cases relied on evidence that

“ Laser D

ynamics . . . arguably would find inadequate to support EMVR,” and that the evidence presented by Power Integrations was comparable to the evidence in the prior cases. J.A. 26; see Bose Corp. v. JBL, Inc. , 274 F.3d 1354, 1361 (Fed. Cir. 2001); Tec Air, Inc. v. Denso Mfg. Mich

. Inc. , 192 F.3d 1353, 1362 (Fed. Cir. 1999); Fonar Corp. v. Gen

. Elec. Co. , 107 F.3d 1543, 1552

– 53 (Fed. Cir. 1997). Despite the district court’s sugge stion to the contrary

, there is no conflict between Laser D

ynamics and these earlier cases, and subsequent cases have relied on L aser D

ynamics

. See VirnetX , 767 F.3d at 1326

– 27; Co mmonwealth Sci. & Indus. Research Org. v. Cisco Sys., Inc.

, 809 F.3d 1295, 1301

– 02 (Fed. Cir. 2015); Versata Software, Inc. v. SAP Am., Inc. , 717 F.3d 1255, 1268 (Fed. Cir. 2013). Laser D

ynamics discussed how a patentee can prove that a patented feature forms the basis for consu mer demand in the context of multi

- component products. There we explained that “[i]t is not enough to merelyPOWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 22

show that the [patented feature] is viewed as valuable, important, or even essential to the use of the [infringing product].” Laser D

ynamics, 694 F.3d at 68. Moreover, “proof that co nsumers . . . choose the [infringing product] having the [patented] functionality says nothing as to whether the presence of that functionality is what mot ivates customers to buy [an infringing product] in the first place.” Id. None of the earlier cases th at the district court cited discussed other valuable features that made the application of the e ntire m arket v alue r ule inappropriate. See Bose , 274 F.3d at 1361; Tec Air
, 192 F.3d at 1362; Fonar , 107 F.3d at 1552

– 53. These cases merely consi dered whether a patented feature formed the basis for consumer demand and do not conflict with the legal test articulated in Laser D

ynamics , which is binding

. As Laser D

ynamics , Versata, and VirnetX held, the e ntire m arket v alue r ule is appropriate only when the patented feature is the sole driver of customer demand or substantially creates the value of the component parts

. LaserDynamics
, 694 F.3d at 67 ; Versata , 717 F.3d at 1268; VirnetX , 767 F.3d at 1326 . The burden of proof in this respect is on the pa tent holder. LaserDynamics
, 694 F.3d at 67

. The question is whether the accused product, compared to other products in the same field, has features that would cause consumers to purchase the products beyond the patented feature, i.e., valuable features

. Where the accu sed infringer presents evidence that its accused product has other valuable features beyond the patented feature , the patent holder must establish that these features are not relevant to consumer choice. A patentee may do this by showing that the patented fe ature “alone motivates customers to purchase [the infrin ging product]” in the first place. See id. at 69. But when the product contains multiple valuable features, it is not enough to merely show that the patented feature is viewed as essential, that a p roduct would not be comme r-POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 23

cially viable without the patented feature, or that co nsumers would not purchase the product without the patented feature. Id. at 68

. When the product contains other valuable features, the patentee must prove that those other feat ures did not influence purchasing dec isions.
Here, the power supply controllers had other valuable features, such as jittering. The district court noted that “there is evidence in the record that other features are important and are highlighted by the respective parties” and that “there is no question that . . . there are other valuable features.” 6 J.A. 1764. In fact, Power Integrations sought infringement damages from Fairchild on the jittering feature in these same products in a separate lawsuit based on different patents, and we affirmed the judgment of infringement. See Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.

, 843 F.3d 1315 (Fed. Cir. 2016). Moreover, many of Fairchild’s technical ma rketing documents specifically mention the jitte ring fe ature and other features in addition to the ’079 patented feature. There is no proof that these features, including jittering, did not affect consumer demand. Without such proof, Power Integrations did not meet its burden to show that the patented f eature was the sole driver of consumer demand, i.e., that it alone motivated consumers to buy the accused products. 7

6 Moreover, in an order denying a permanent i njunction, the district cou rt noted that the circuits “contain numerous features aside from the patented features.” J.A. 2293.

7 Power Integrations provided testimony that the patented feature drove demand for the purchase of some products. This evidence almost entirely concerned Power Integrations’ own products, TOPSwitch

- Fx andPOWER INTEGRATIONS , INC

. v. FAI RCHILD SEMICONDUCTOR 24

Because the evidence presented by Power Integr ations was insufficient as a matter of law to invoke the

e ntire m arket v alue r ule, we vacate the award of damages and remand for a new trial

. In light of this disposition, we need not address Fairchild’s other arguments about the sufficiency of the reasonable

- royalty evidence.

C ONCLUSION We affirm the judgment of infringement of the asser ted claims of the ’ 079 and the ’908 patent s. We vacate the damages award and remand for further proceedings consistent with this opinion.

AFFIRMED

- IN

- PART, VACATED

- IN

- PART , REMANDED

TOPSwitch

- Gx, not Fairchild’s. Power Integrations co ntends that the only difference between the older TOPSwitch

- Fx and the newer TOPSwitch

- Gx controller chips is the frequency reduction feature covered by the ’079 patent , and that the frequency reduction feature was the reason why its customers would buy the Gx product over the Fx product. We, however, explained in L aserDynamics that such a comparator, without more, is not enough to prove that the frequency reduction feature alone drives consumer demand for power supply contro ller chips. 694 F.3d at 68 (“Put another way, if given a choice between two otherwise equivalent laptop compu ters, only one of which practices optical disc discrimin ation, proof that co nsumers would choose the laptop computer having the disc discrimination functionality says nothing as to whether the presence of that functio nality is what motivates consumers to buy a laptop co mputer in the first place. It is this latter and higher degre e of proof that must exist to support an entire market value rule theo ry.”). Moreover, this evidence does not address the other valuable features in Fairchild’s products.POWER INTEGRATIONS , INC

. v. FAIRCHILD SEMICONDUC TOR 25

C OSTS Costs to neither party.