Power Integrations v. Fairchild Semiconductor

• Decision Date: 12 December 2008
• Docket Number: C.A. No. 04-1371-JJF.
• Citation: 589 F.Supp.2d 505
• Parties: POWER INTEGRATIONS, INC., a Delaware corporation, Plaintiff, v. FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., a Delaware corporation, and Fairchild Semiconductor Corporation, a Delaware corporation, Defendants.
• Court: U.S. District Court — District of Delaware

Page 505

589 F.Supp.2d 505

POWER INTEGRATIONS, INC., a Delaware corporation, Plaintiff, v. FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., a Delaware corporation, and Fairchild Semiconductor Corporation, a Delaware corporation, Defendants.

C.A. No. 04-1371-JJF.

United States District Court, D. Delaware.

December 12, 2008.

COPYRIGHT MATERIAL OMITTED

Frank E. Scherkenbach, Esquire of Fish & Richardson P.C., Boston, MA, Howard G. Pollack, Esquire and Michael R. Headley, Esquire of Fish & Richardson P.C., Redwood City, CA, William J. Marsden, Jr., Esquire and Kyle Wagner Compton, Esquire of Fish & Richardson P.C., Wilmington, DE, for Plaintiff.

G. Hopkins Guy, III, Esquire; Vickie L. Feeman, Esquire; Bas de Blank, Esquire; Gabriel M. Ramsey, Esquire and Brian H. VanderZanden, Esquire of Orrick, Herrington & Sutcliffe LLP, Menlo Park, CA, Steven J. Balick, Esquire; John G. Day, Esquire and Lauren E. Maguire, Esquire of Ashby & Geddes, Wilmington, DE, for Defendants.

MEMORANDUM OPINION

FARNAN, District Judge.

Pending before the Court is a Motion For Remitter [sic], Judgment As A Matter Of Law, Or, In The Alternative, New Trial Concerning Damages (D.I. 613) filed by Defendants, Fairchild Semiconductor International, Inc. and Fairchild Semiconductor Corporation (collectively, "Fairchild"). For the reasons set forth below the Court will grant the Motion to the extent that it requests a remittitur and reduce the amount of damages awarded to Power Integrations to $6,116,720.58, an amount representing 82% of the jury's damages verdict.

BACKGROUND

The background relevant to this action has been set forth by the Court in previous decisions rendered in this case. (D.I. 231, 683). By way of summary, a jury returned a verdict in favor of Power Integrations, Inc. ("Power Integrations") on the issues of infringement and willful infringement. The jury awarded Power Integrations damages in the total amount of $33,981,781, representing: (1) $14,981,828 in lost profits from lost sales related to the '876 and '851 patent only, (2) $1,952,893 in past lost profits from price erosion, (3) $13,018,379 in future lost profits from price erosion, and (4) $4,028,681 in reasonable royalties.

A second, different jury also returned a verdict in favor of Power Integrations on the validity of the patents-in-suit. Inequitable conduct was tried before the Court, and the Court concluded that Fairchild failed to establish that the patents were unenforceable due to inequitable conduct. (D.I. 683, 684).

STANDARD OF REVIEW

I. Judgment As A Matter Of Law

To prevail on a renewed motion for judgment as a matter of law following a jury trial, the moving party "`must show that the jury's findings, presumed or express are not supported by substantial evidence or, if they were, that the legal conclusions implied [by] the jury's verdict cannot in law be supported by those findings.'" Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed.Cir.1998) (citations omitted). In assessing the sufficiency of the evidence, the court must give the nonmoving party, "as [the] verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in the evidence in his favor, and in general, view the record in the light most favorable to him." Williamson v. Consolidated Rail Corp., 926 F.2d 1344, 1348 (3d Cir.), reh'g en banc denied, 1991 U.S.App. LEXIS 16758 (3d Cir.1991); Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed. Cir.1984).

The court may not evaluate the credibility of the witnesses, may not weigh the evidence, and may not substitute its view of the evidence for the jury's view. Price v. Delaware Dept. of Correction, 40 F.Supp.2d 544, 550 (D.Del.1999). Rather, the court must determine whether the evidence reasonably supports the jury's verdict. Dawn Equip. Co. v. Kentucky Farms, Inc., 140 F.3d 1009, 1014 (Fed.Cir. 1998). Motions for judgment as a matter of law are granted "sparingly" and only in those circumstances in which "the record is critically deficient of the minimum quantum of evidence in support of the verdict." Johnson v. Campbell, 332 F.3d 199, 204 (3d Cir.2003).

II. New Trial

Pursuant to Federal Rule of Civil Procedure 59(a), a new trial may be granted on all or part of the issues "for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States." Unlike a motion for judgment as a matter of law, the trial court is not required to construe the evidence in the light most favorable to the verdict winner when considering whether a new trial is warranted.

The decision to grant a new trial lies within the discretion of the trial court. In exercising this discretion, the trial court should consider the nature and character of the trial, including its complexity. Lind v. Schenley Industries, Inc., 278 F.2d 79, 89 (3d Cir.), cert. denied, 364 U.S. 835, 81 S.Ct. 58, 5 L.Ed.2d 60 (1960). Although the jury's verdict should be scrutinized by the trial court more carefully in long, complex cases dealing with material outside the normal experience of most jurors, id., the court should not substitute its view of the evidence for that of the jury's assessment. A new trial should only be granted when allowing a verdict to stand would result in a miscarriage of justice. Williamson v. Consolidated Rail Corp., 926 F.2d 1344, 1352 (3d Cir.1991). In other words, a court should not disturb a verdict unless the verdict, "on the record, cries out to be overturned or shocks [the court's] conscience." Id. at 1353 (citing EEOC v. Delaware Dep't of Health & Social Serv., 865 F.2d 1408, 1413 (3d Cir.1989)).

III. Remittitur

When a jury's verdict is so grossly excessive as to shock the conscience, a trial court may, in the alternative to a new trial, order a remittitur. Williams v. Martin Marietta Alumina, Inc., 817 F.2d 1030, 1038 (3d Cir.1987). A verdict shocks the conscience when it bears no rational relationship to the evidence presented at trial. Gumbs v. Pueblo Int'l, Inc., 823 F.2d 768, 773 (3d Cir.1987). Although the decision to grant a remittitur lies within the discretion of the district court, a trial court may not reduce the damages award merely because it would have granted a lesser amount than that which the jury granted. If remittitur is appropriate, the trial court should reduce the damage award to the highest amount the jury could have properly awarded based on the relevant evidence. IPPV Enter. LLC v. Echostar Comms. Corp., 191 F.Supp.2d 530, 572 (D.Del.2002).

DISCUSSION

By its Motion, Fairchild contends that the damages awarded by the jury are legally incorrect and without evidentiary support. Specifically, Fairchild contends that Power Integrations cannot recover damages for infringement of a patent that occurred entirely outside of the United States, yet the jury improperly awarded Power Integrations "worldwide" damages, which were not caused by any conduct by any party within the United States. In support of its argument, Fairchild directs the Court to the text of 35 U.S.C. § 271(a), and the Supreme Court's recent decision in Microsoft Corp. v. AT & T Corp., 550 U.S. 437, 127 S.Ct. 1746, 1750, 167 L.Ed.2d 737 (2007), as well as nearly 150 years of Supreme Court precedent.

In this case, the jury clearly adopted the measure of damages posed by Power Integrations' expert, Dr. Troxel. Dr. Troxel testified at trial, that his calculations were based on a worldwide sales measure of damages. However, Power Integrations contends that this worldwide sales measure of damages does not equate to infringement activities that occurred outside the United States. Rather, Power Integrations contends that it presented evidence of Fairchild's infringement within the United States, "including direct sales or offers to sell infringing parts in the United States, the manufacturing of infringing parts in the United States and offers for sale from the Untied States that result in actual sales abroad, and inducing and contributing to importation of infringing parts into the United States by, among other things, affirmatively indemnifying foreign customers like Samsung against U.S. infringement claims." (D.I. 646 at 10-11). Relying on the Federal Circuit's decision in Rite-Hite v. Kelley, 56 F.3d 1538 (Fed.Cir.1995), Power Integrations contends that this evidence supports the jury's verdict, because compensatory damages under 35 U.S.C. § 284 are broadly construed to include reasonably foreseeable damages resulting from lost sales of a competitive product.

As a threshold matter, the Court notes that its previous decisions pertaining to this issue have not directly addressed the substance of the questions presented here. The Court's first ruling was made in the context of discovery and the liberal discovery policies under the Federal Rules of Civil Procedure. (D.I. 54). The Court's later rulings merely expressed the Court's view that questions of fact remained on the issues, such that the Court preferred a full trial on the merits of the issue before making a ruling. (D.I. 266, 384). Having had a full exposition of the evidence through trial, the Court is, at this juncture, able to evaluate whether Power Integrations has established its entitlement to the jury's award of damages which is based on a worldwide sales figure.

In pertinent part, Section 271(a) provides:

whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

35 U.S.C. § 271(a) (emphasis added). Section 284 also provides, in relevant part:

Upon a finding for the claimant the court shall award the claimant damages to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer....

35 U.S.C. § 284. It is well-established that our patent laws...