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Fairchild Semiconductor Corporation v. Power Integrations Inc.

United States District Court, D. Delaware

March 16, 2018

FAIRCHILD SEMICONDUCTOR CORPORATION, and FAIRCHILD (TAIWAN) CORPORATION, Plaintiffs,
v.
POWER INTEGRATIONS, INC., Defendant.

          John G. Day and Andrew C. Mayo, ASHBY & GEDDES, Wilmington, DE. Blair M. Jacobs, Christina A. Ondrick, and Patrick J. Stafford, PAUL HASTINGS LLP, Washington, DC. Attorneys for Plaintiffs Fairchild Semiconductor Corporation and Fairchild (Taiwan) Corporation.

          Joseph B. Warden, FISH & RICHARDSON, P.C., Wilmington, DE. Frank E. Scherkenbach, FISH & RICHARDSON, P.C., Boston, MA. Howard G. Pollack and Michael R. Headley, FISH & RICHARDSON, P.C., Redwood City, CA. Attorneys for Defendant Power Integrations, Inc.

          MEMORANDUM OPINION

          STARK, U.S. DISTRICT JUDGE.

         The Court held an eight-day jury trial in this patent infringement case in May and June 2015. (See generally D.I. 376-403) Both parties asserted patents against one another. At the conclusion of the trial, the jury returned a verdict. (See D.I. 402) Most pertinent here is the verdict with respect to Defendant Power Integrations, Inc.'s (“Power”) U.S. Patent No. 7, 995, 359 (the “'359 patent”). The jury found that Plaintiffs Fairchild Semiconductor Corporation and Fairchild (Taiwan) Corporation (collectively, “Fairchild”) directly infringed claims 29 and 31 of the '359 patent under the doctrine of equivalents and indirectly infringed the same claims by actively inducing infringement and contributing to infringement of the same, and awarded Power $100, 000 for this infringement. (See Id. at 2-3, 6) On August 7, 2015, the Court entered judgment on this verdict. (See D.I. 427 at 2) After much additional litigation -including the Federal Circuit's decision that a jury instruction used in yet another trial between these same parties, and used in this case as well, was erroneous - Defendant Power now moves for entry of final judgment pursuant to Rule 58 of the Federal Rules of Civil Procedure as to induced infringement of the '359 patent. (See D.I. 552) For the reasons explained below, the Court will deny Power's motion.

         I. BACKGROUND

         This case is one of many patent infringement suits, in this Court and others, involving the same parties. In one related case, Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., et al, CA. No. 08-309 (D. Del.) (hereinafter referred to as the “Related Case”), the Court presided over a patent infringement jury trial in April 2012. In the Related Case, Fairchild and Power proposed competing jury instructions for indirect infringement through active inducement, and the Court ultimately adopted Power's proposal in large part.[1] (C.A. No. 08-309 D.I. 575) See also Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 843 F.3d 1315, 1330 (Fed. Cir. 2016) (“Fairchild II”).

         In the instant case, Fairchild used the Court's final jury instructions from the Related Case as the source for most of its proposed jury instructions, including the one for “active inducement, ” even though Fairchild had previously objected to this instruction when Power offered it in the Related Case. (See D.I. 320) The Court ultimately adopted the same jury instruction for “active inducement” as it had used in the Related Case.[2] (See D.I. 400 at 29-30)

         Following the jury trial in this case and the Court's entry of judgment, the Federal Circuit on December 12, 2016 issued an opinion in an appeal of the Related Case. See Fairchild II, 843 F.3d 1315 (Fed. Cir. 2016). Relevant to the pending motion, the Federal Circuit vacated the jury's verdict on induced infringement, because this Court's jury instruction in the Related Case misstated the law on active inducement. See Id. at 1329.

         In the Related Case, this Court had adopted an instruction on induced infringement that provided in part, with respect to direct infringement by third parties:

However, that infringement need not have been actually caused by the party's actions. All that is required is that the party took steps to encourage or assist that infringement, regardless of whether that encouragement succeeded, or was even received.

Id. at 1330.

         The Federal Circuit explained, however, that “[t]o prevail under a theory of indirect infringement, [one] must first prove that [the other's] actions led to direct infringement of the [patents-in-suit].” Fairchild II, 843 F.3d at 1331. Therefore, “a finding of induced infringement requires actual inducement.” Id. The Federal Circuit held that this Court's instruction “left the jury with the incorrect understanding that a party may be liable for induced infringement even where it does not successfully communicate with and induce a third-party direct infringer.” Id. at 1330-31. As this Court's instruction was a misstatement of the law on actual inducement, the Federal Circuit vacated the verdict in the Related Case. See Id. at 1332.

         Following the Federal Circuit's decision, Fairchild advised the Court that this “ruling impacts the finding of induced infringement of [the '359 patent in the instant case] because the jury instruction concerning induced infringement in this case was identical to the jury instruction the Federal Circuit rejected in Fairchild II.” (D.I. 521 at 1) Fairchild further informed the Court that it would work with Power in an “attempt to resolve this issue without motion practice.” (Id.)

         On June 16, 2017, the parties wrote to the Court to request a status conference “to address the import of the Federal Circuit's opinion” on this case. (D.I. 527 at 1) In a joint status report dated July 11, 2017, Power acknowledged “the Federal Circuit's ruling . . . has implications for the inducement finding against Fairchild with respect to [the] '359 patent, given that [the] finding is premised on the same jury instruction the Federal Circuit has now modified.” (D.I. 530 at 1; see also July 12, 2017 Tr. (D.I. 544) at 13 (Power “confess[ing]” that the Federal Circuit's decision impacted outcome here on '359 patent)) Power proposed dismissing the '359 patent without prejudice or, in the alternative, severing the patent from this case and moving it to the Related Case (where a new trial on remand from the appeal was necessary) for final resolution. (See D.I. 530 at 1-2; July 12, 2017 Tr. at 14) Fairchild strongly opposed both of Power's proposals. (See D.I. 530 at 2-3; July 12, 2017 Tr. at 18-20) During a teleconference on July 12, 2017, the Court and the parties discussed two other options - briefing a motion to dismiss with or without prejudice or scheduling a bench trial - and the Court then ordered the parties to submit a joint status report with their views by July 28. (July 12, 2017 Tr. at 25)

         Instead, on July 21, 2017, Power filed an appeal in the Federal Circuit (D.I. 532), which, on July 26, Fairchild moved to strike on the basis of lack of finality (D.I. 535). On July 28, the parties submitted a contentious joint status report that did not address the two options proposed by the Court on July 12. (D.I. 537) During a September 11, 2017 teleconference concerning Fairchild's motion to strike, the Court decided to defer ruling on the motion as the Federal Circuit was at the same time considering whether to dismiss Power's appeal. (Sept. 11, 2017 Tr. (D.I. 546) at 29-31) But the Court also expressed its views that the case was not final with respect to Fairchild's inducement of infringement of Power's '359 patent, as there was work still to be done, as indicated by the discussion the parties had had with the Court in July. (See id.) On October 12, 2017, the Federal Circuit found that this case was not final and dismissed Power's appeal. See Fairchild (Taiwan) Corp. v. Power Integrations, Inc., Case No. 2017-2327, -2405, Dkt. 23 at 4 (Fed. Cir. Oct. 12, 2017).

         On December 19, 2017, the parties submitted yet another joint status report. (D.I. 550) Power proposed that the appropriate course of action was to move for entry of final judgment. (See Id. at 1) Fairchild proposed the Court's earlier suggestion of either proceeding with motion practice or a bench trial. (See Id. at 2) Power indicated that it “would not waive its jury trial right.” (Id. at 1) On December 28, 2017, the Court ordered that Power file a motion for entry of final judgment and, at the same time, set a three-day jury trial, if necessary, to begin on June 5, 2018. (D.I. 551)

         Power filed its motion for final judgment on January 5, 2018 (D.I. 552, 553), Fairchild opposed on January 19 (D.I. 555), and Power filed a reply brief on February 2 (D.I. 558). The Court heard argument on the ...


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