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Media Alerts - Power Integrations, Inc. v. Fairchild Semiconductor Intern., Inc.
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April 11, 2013
  Power Integrations, Inc. v. Fairchild Semiconductor Intern., Inc.
Headline: Federal Circuit finds jury award improperly based on foreign sales as well as inadmissible expert testimony

Area of Law: Patent law

Issue(s) Presented: Whether expert testimony was adequately supported and whether Power Integrations can recover for patent infringement occurring outside the United States.

Brief Summary: The court rules in favor of Fairchild on both issues, upholding an 82% reduction in an award but remanding for an accounting and new trial on damages.

Significance: Interest in the effects of foreign sales on U.S. rights has increased since the Supreme Court in Kirtsaeng v. John Wiley & Sons, Inc., found such sales to exhaust U.S. copyrights. This opinion indicates that, unlike copyrights, patent rights are territorial.

Extended Summary: After two jury trials and a bench trial, the district court remitted 82% of a $33 million jury award but enhanced damages by doubling the remainder.

On appeal, Fairchild argued that the district court correctly determined that the jury's damages award was improperly based on worldwide sales and that in formulating its award the jury relied on inadmissible expert testimony. The Federal Circuit agrees with both propositions.

On the first issue, the court, quotes an 1856 Supreme Court opinion holding that use of a patented invention outside the United States is not an infringement of U.S. rights. Slip. Op. at 37. Thus, as to "whether Power Integrations is entitled to compensatory damages for injury caused by infringing activity that occurred outside the territory of the United States[, t]he answer is no." Slip. Op. at 38.

Yet plaintiff's expert "did not quantify an amount of damages based on any offer for sale by Fairchild in the United States." Slip. Op. at 39. Thus, the court holds, "the district court correctly decided that the jury's original damages award was contrary to law." Id.

With regard to the expert's testimony generally, the court finds that the district court abused its discretion in admitting it. Slip. Op. at 43. Despite that, the court apparently sees enough substantial evidence in the existing record to remand for a new trial to determine the proper amount of damages for Fairchild's direct infringement." Slip. Op. at 43.

Panel: Lourie, O'Malley, and Reyna, Circuit Judges

Date of Issued Opinion: March 26, 2013

Docket Number: 2011-1218, -1238

Decided: March 26, 2013

Case Alert Author: Thomas G. Field, Jr.

Counsel: Frank E. Scherkenbach, Fish & Richardson P.C., for plaintiff-cross appellant. Blair M. Jacobs, McDermott Will & Emery LLP, for defendants-appellants.

Author of Opinion: Reyna, Circuit Judge.

    Posted By: Thomas Field @ 04/11/2013 08:15 AM     Federal Circuit  

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