United States: Damages For Overseas Sales Not Established By A Showing Of Direct Infringement In The United States And Foreseeability Of The Overseas Sales

In Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., Nos. 11-1218, -1238 (Fed. Cir. Mar. 26, 2013), the Federal Circuit affirmed the district court’s finding of nonobviousness, affirmed-in-part and reversed-in-part the district court’s ruling on claim construction, vacated the district court’s order of remittitur and its attendant damages award, found error in the district court’s exclusion of evidence related to prenotice price erosion and in its refusal to grant Power Integrations, Inc. (“Power Integrations”) a postverdict accounting, vacated the district court’s finding of willful infringement, and remanded to the district court for further proceedings.

Power Integrations filed suit against Fairchild Semiconductor International, Inc. (“Fairchild”) for infringement of U.S. Patent Nos. 6,249,876 (“the ’876 patent”); 6,107,851 (“the ’851 patent”); 6,229,366 (“the ’366 patent”); and 4,811,075 (“the ’075 patent”).  The patents relate to technology used in electric chargers for mobile phones.  Following two jury trials, a bench trial, and post-trial proceedings, including a motion for remittitur, the district court found the patents valid and infringed, and awarded compensatory and enhanced damages to Power Integrations.  Fairchild appealed, asserting that the district court erred in its claim construction, in denying Fairchild’s motion for JMOL on obviousness, in formulating its remitted damages award, and in finding willful infringement.  On cross-appeal, Power Integrations argued that the district court erred in granting Fairchild’s motion for remittitur, in excluding evidence related to price erosion, and in denying Power Integrations’ motion for postverdict accounting.

First, the Federal Circuit affirmed the district court’s construction of “frequency variation signal” in the ’851 and ’366 patents as “an internal signal that cyclically varies in magnitude during a fixed period of time and is used to modulate the frequency of the oscillation signal within a predetermined frequency range.”  Slip op. at 15.  The Court rejected Fairchild’s argument that the term had a plain and ordinary meaning, noting that an expert for Power Integrations testified to the contrary.  Instead, the Court relied on the intrinsic record and found that the district court’s construction was proper.  The Federal Circuit reversed the district court’s construction of “soft start circuit” in the ’851 and ’366 patents as
means-plus-function limitations.  The Court reasoned that the term had sufficient structure in the claims of both patents to avoid means-plus-function claiming.  The Court stated that on remand, the district court should construe the claims, assess any effects the new constructions may have on validity and infringement, and determine whether to order a new trial.

“Power Integrations is incorrect that, having established one or more acts of direct infringement in the United States, it may recover damages for Fairchild’s worldwide sale of the patented invention because those foreign sales were the direct, foreseeable result of Fairchild’s domestic infringement.”  Slip op. at 38.

Next, the Federal Circuit affirmed the district court’s denial of Fairchild’s motion for JMOL on obviousness.  The Court explained that “[t]he record here is replete with testimony and other evidence demonstrating that Power Integrations’ patented technology was far less obvious than [the prior art] on its face suggests.”  Id. at 31.  The Court concluded that the jury’s conclusion of nonobviousness was supported by substantial evidence of objective considerations of nonobviousness, including that no one in the industry “was able to come up with the patented invention,” commercial success, praise, and copying.  Id. at 32.

Regarding damages, the Federal Circuit first held that the district court correctly concluded that the jury’s total damages award of over 33 million dollars was contrary to law.  The Court reasoned that the jury award was based on worldwide sales, and that Power Integrations was not “entitled to compensatory damages for injury caused by infringing activity that occurred outside the territory of the United States.”  Id. at 38.  The Court rejected Power Integrations’ foreseeability theory of worldwide damages, stating that “Power Integrations is incorrect that, having established one or more acts of direct infringement in the United States, it may recover damages for Fairchild’s worldwide sales of the patented invention because those foreign sales were the direct, foreseeable result of Fairchild’s domestic infringement.”  Id.  “To the contrary, the entirely extraterritorial production, use, or sale of an invention patented in the United States is an independent, intervening act that, under almost all circumstances, cuts off the chain of causation initiated by an act of domestic infringement.”  Id. (citing Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869, 2884 (2010)).  The Court also reasoned that the testimony by Power Integrations’ damages expert was unreliable, because it was derived from unreliable data and built on speculation.

The Federal Circuit next held that the district court was incorrect in reducing the worldwide damages award by 82%.  The district court had reasoned that Fairchild was liable for induced infringement based on the importation of devices by third parties, including Samsung.  The district court accepted testimony from Power Integrations’ damages expert that 18% of the devices sold worldwide were imported into the United States.  The Court disagreed with the district court, concluding that “the evidence on the record does not support the district court’s decision to base its remitted damages award on a percentage of Samsung’s worldwide sales of mobile phones.”  Id. at 45.  “[The expert] did not present evidence linking Samsung’s mobile phone sales data to Fairchild’s infringing power circuits, other than to say that Fairchild sold its infringing components to Samsung.”  Id. at 47.  The Court thus vacated the district court’s damages award, stating that there was no basis upon which a reasonable jury could find Fairchild liable for induced infringement.

Turning to direct infringement, the Court held that the record supported a finding of Fairchild’s liability for direct infringement, at least with respect to the products Fairchild stipulated it made or sold within the United States or imported within the United States.  The Court thus affirmed the jury’s implicit finding that Fairchild was liable to Power Integrations for direct infringement, and instructed the district court to hold a new trial to determine the proper amount of damages.

The Federal Circuit reversed the district court’s grant of Fairchild’s motion for partial SJ, which specifically granted Fairchild’s request that all damages be calculated based on conditions occurring on or after the notice date and thus prohibited Power Integrations from introducing evidence of prenotice price erosion.  The Court instructed that in the new trial on damages for direct infringement, the district court shall admit Power Integrations’ evidence of prenotice price erosion.

Finally, the Federal Circuit reversed the district court’s denial of Power Integrations’ post-trial motion for an accounting of Fairchild’s postverdict infringing sales.  The Court reasoned that Power Integrations’ complaint did not contain any temporal limit on the damages requested and that the Court saw nothing in the record to suggest that Power Integrations waived its right to a postverdict accounting.  The Court noted that “Power Integrations’ purported waiver was unclear enough that the district court found it ‘ambiguous’ whether Fairchild had actually agreed at some point to an accounting.”  Id. at 57.  In reversing the district court’s ruling, however, the Federal Circuit instructed that the scope of the accounting should be limited to any postverdict infringing sales that were substantially related to the direct infringement.  “At this point, Power Integrations has had a full and fair opportunity to develop the record, and its right to a post-verdict accounting is not an unlimited after-hours hunting license.”  Id. at 58.

Judges:  Lourie, O’Malley, Reyna (author)
[Appealed from D. Del., Judge Stark]

This article previously appeared in Last Month at the Federal Circuit, April, 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
14 Nov 2018, Conference, Washington, DC, United States

Finnegan is a Silver sponsor of the sixth annual World Intellectual Property Forum, hosted by Intellectual Professionals LLP. Finnegan partner Clare Cornell will present “Trademarks v. Company Names” and partner Patrick Coyne will present “Current Issues in U.S. Patent Law and Reform: The Next Wave”

16 Nov 2018, Seminar, Copenhagen, Denmark

Innovative companies, large and small, use patents to protect their key inventions. Obtaining valuable patents, however, requires skilled patent counsel and an in-depth knowledge of the legal requirements for securing claims that are strategically useful to your company.

17 Nov 2018, Conference, Washington, DC, United States

Finnegan partner Clare Cornell will present “Covert Trademark Use in the Internet: Licit or Illicit” at the Asian Patent Attorneys Association Conference.

Similar Articles
Relevancy Powered by MondaqAI
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions