Power Integrations Wins First Round in Patent Litigation against Fairchild

In the first of three related trials over patent infringement, Power Integrations (www.powerint.com) has won a verdict against Fairchild Semiconductor (www.fairchildsemi.com) according to statements issued yesterday by both semiconductor suppliers. A jury found that Fairchild has willfully infringed all four Power Integrations patents asserted in the case, and has awarded Power Integrations damages of approximately $34 million. However, Fairchild will have an opportunity to counter this verdict in the second and third phases of this lawsuit when the court addresses the issues of patent validity and enforceability.

During the second trial, which is scheduled to begin on December 4, Fairchild will challenge the validity of the infringed Power Integrations patents. However, according to Power Integrations, these patents are presumed to be valid, and Fairchild cannot prevail unless it proves the patents are invalid by clear and convincing evidence. Should Fairchild be unable to prove the patents invalid, Power Integrations intends to seek an injunction against the continued manufacture, importation and sale of the infringing parts, as well as enhancement of the damages award based on the jury’s finding of willful infringement.

The 33 Fairchild parts asserted to have infringed (see table below) were found to infringe and may be subject to an injunction, states Power Integration. These parts are currently found in such end products as cellphone chargers, DVD players, TV set-top boxes, LCD monitors and others.

“Power Integrations respects the intellectual property of others, and we expect our competitors to do the same,” said Balu Balakrishnan, president and CEO of Power Integrations. “We are the leader in our market thanks in large part to the intellectual property that we have worked hard to develop over nearly two decades. This is our third successful effort to protect this intellectual property against unlawful infringement by our competitors, and we will continue making every effort to protect it going forward.”

Meanwhile, in its announcement Fairchild Semiconductor stated that it continues to believe it will prevail in this patent infringement lawsuit, despite the jury verdict to the contrary in the first trial. The company also said it will continue offering its full line of pulse-width modulation (PWM) products.

The company also notes that it has yet to present all of its defenses to Power Integrations’ claims. The company believes that Power Integrations’ patent claims are invalid, and its invalidity defenses have yet to be heard by a jury. Fairchild believes it has identified inventions and publications, known as prior art, that pre-date the Power Integrations patents and that Fairchild believes would invalidate the Power Integrations patents. In the second trial, a new jury will be hearing the case.

In the third and final trial scheduled for December, the court will address the issue of enforceability. For Power Integrations to prevail in the case and receive a judgment and injunction against Fairchild, the patents found to be infringed must also be found to be valid and enforceable in the remaining phases of trial, according to Fairchild. Final resolution of the matter is not expected until 2007.

Power Integrations originally filed this lawsuit in October of 2004. The suit, which was filed in the U.S. District Court for the District of Delaware, stated that certain integrated circuits produced by Fairchild infringed upon U.S. Patent Nos. 4,811,075; 6,107,851; 6,229,366 and 6,249,876, which are owned by Power Integrations.

Table. List of infringing Fairchild parts: