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McDermott Achieves Sweeping Federal Circuit Victory for Fairchild Semiconductor

Friday, March 29, 2013

Firm Continues to Advance Patent Rights in Hard-Fought Battle

International law firm McDermott Will & Emery LLP has won a sweeping victory from the Federal Circuit in favor of its client Fairchild Semiconductor in the high-profile patent infringement case, Power Integrations, Inc. v. Fairchild Semiconductor International, Inc.

The McDermott team, led by partner Blair Jacobs, obtained a very significant victory on Tuesday, March 26th, when the Federal Circuit issued its long-awaited opinion, unanimously vacating a $12.9 million damages award, which was originally remitted from a $32M jury award. The 59-page opinion was a sweeping victory for Fairchild which took more than 14 months to issue.

“We appreciate the careful consideration that went into the decision in favor of our client,” said Mr. Jacobs. “The court ruled on the evidence and came to the only conclusion it could have. We are pleased that we were able to effectively convey the client’s side of this dispute.”

Over the past three years, the McDermott team has achieved a series of victories for Fairchild, including a favorable ruling of infringement against the plaintiff in a jury trial last year in Delaware.

The plaintiff’s theory of liability relied primarily on induced infringement because Fairchild sells its semiconductor chips primarily in Asia. Yet, these products sold overseas by Fairchild may eventually be imported and sold into the United States by other companies, without involvement by Fairchild, after being incorporated into other companies’ power chargers, cell phones and other consumer products.

In the appellate decision, the Federal Circuit agreed with Fairchild and ruled that the plaintiff was not entitled to damages for induced infringement based on Fairchild’s extra-territorial activity. The court also agreed with Fairchild and ruled that the plaintiff’s expert damages theories were unreliable, speculative and should not have been admitted by the district court. Given this ruling, the Federal Circuit vacated the damages award in its entirety and took what was originally a $32 million jury award, with additional findings of willfulness and fees, down to zero.

The case was remanded for a new damages trial in which the plaintiff will be limited to a theory of direct infringement, which necessarily includes only sales of infringing products by Fairchild in the United States. Fairchild’s direct U.S. sales revenue for the relevant time period is less than $1 million. The result of the Federal Circuits’ opinion will be a drastic reduction of damages—most likely to less than $100,000 in any new trial on damages, whereas Fairchild faced the possibility of $100 million in damages when McDermott inherited the case.

As part of its decision, the Federal Circuit also ruled favorably for Fairchild in reversing a claim construction ruling on the term “soft start circuit,” a term that appears in two of the patents asserted against Fairchild.

In addition to Mr. Jacobs, the appellate team included partners Terrence McMahon, Leigh Martinson, Christina Ondrick, Rob Walters, and associate Rose Whelan with assistance from Michael Rodgers and Natalia Blinkova, now a Professor of Law at the University of Texas.

About McDermott Will & Emery

McDermott Will & Emery is a premier international law firm with a diversified business practice. Numbering more than 1,000 lawyers, we have offices in Boston, Brussels, Chicago, Düsseldorf, Frankfurt, Houston, London, Los Angeles, Miami, Milan, Munich, New York, Orange County, Paris, Rome, Seoul, Silicon Valley and Washington, D.C. Further extending our reach to Asia, we have a strategic alliance with MWE China Law Offices in Shanghai.

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