Permanent Injunction Granted After Jury Trial Where Plaintiff and Defendant Were Competitors and Plaintiff's Products that Embodied Patent-in-Suit Constituted Core of Plaintiff's Business

by Jeffer Mangels Butler & Mitchell LLP

After a jury trial in which Power Integrations, Inc. ("Power") obtained a verdict of infringement and validity in its favor against Fairchild Semiconductor ("Fairchild"), Power moved for a permanent injunction. In analyzing the motion, the district court first repeated the common test from eBay: "In order to obtain a permanent injunction, Power, as the moving party, must demonstrate each of the following four factors:

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

eBay Inc v. MercExchange, LLC, 547 U.S. 388, 391 (2006).

Turning to the first factor, the district court found that Power had demonstrated irreparable harm because Power practices the patents-in-suit and sales of embodiments of the patents constitute the core of its business. The district court also noted that Power has never licensed the patents-in-suit to any competitor and that Power has been repeatedly praised and recognized as an innovator in its market. The district court also noted that "Fairchild competes with Power, including for "design-win" contracts, whereby a third-party contracts with a supplier (i.e., Power or Fairchild) to design the supplier's products into the third-party's products, essentially locking in that third-party's business for the supplier for a period usually lasting years. (See id. Ex. F at 47-48)' Power will be irreparably harmed by Fairchild competing with Power for these "design-win" contracts using technology that infringes Power's patents-in-suit. Power has already lost sales and seen its prices erode. (D.I. 599 at 1874:3-1876:10; D.I. 595 at 663:1-14)"

The district court also rejected Fairchild's contention that Power has failed to show a sufficient "causal nexus" between the patented features and the demand for Power's and Fairchild's products. "Power has adequately shown such a connection, including through trial evidence demonstrating that customers demand that the "jittering" and output power limiting features be included in the products supplied to them. (D.I. 595 at 797:1-10, 798:4-19) The district court also found that Fairchild's contention that Power could not show irreparable harm because there are other suppliers in the market also lacked merit. See Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1151 (Fed. Cir. 2011) ("It is well-established that the fact that other infringers may be in the marketplace does not negate irreparable harm.") (internal quotation marks omitted). The record before the Court shows that Power and Fairchild view each other as among their most important competitors in the relevant market and have lost business to one another."

In addition, the district court found that Power has demonstrated that the harms it will suffer are not reparable by remedies available at law. The damage to Power's reputation as an innovator, price erosion, and the incumbency effects of Fairchild defeating Power for "design-wins" cannot be fully compensated by payment of damages. See Broadcom, 732 F.3d at 1337 (noting that 'exclusion from a fair opportunity to compete for design wins constitutes irreparable harm')."

Turning to the balance of hardships, the district court also found this factor weighed in favor of Power. "Sales of Fairchild's infringing products account for only a fraction of Fairchild's more than $1.5 billion in annual revenue. (D.I. 742 Ex. B at 1859:18-1860:3, 1456:12-20) Power's revenue, on the other hand, is based largely on devices that practice embodiments of its patents-in-suit. (See id. Ex. E at 8) In this context, Power has shown that the harm that Fairchild will suffer as a result of entry of the injunction does not outweigh the harm that Power would suffer in the absence of an injunction."

Finally, the district court also fund that the public interested favored the entry of the permanent injunction. "Power has further shown that the public interest favors entry of a permanent injunction. See Douglas Dynamics, LLC v. Buyers Products Co., 717 F.3d 1336, 1346 ("Th[e] detrimental effect [of inhibiting innovation] coupled with the public's general interest in the judicial protection of property rights in inventive technology, outweighs any interest the public has in purchasing cheaper infringing products."). Power has been litigating against Fairchild since at least 2004 and, in the instant case, prevailed with respect to the patents-in-suit after a hard-fought trial and post-trial motions."

Accordingly, the district court entered the permanent injunction in favor of Power.

Power Integrations, Inc. v. Fairchild Semiconductor, Case No. C.A. No. 08-309-LPS (D. Del. June 30, 2014)


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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