## Facts

- Power Integrations and Fairchild competed in the market for power-supply controller chips used in AC-to-DC power supplies.
- Power Integrations asserted two patents covering aspects of switching-regulator control and current-limit regulation in controller integrated circuits.
- A jury found Fairchild literally infringed asserted claims of the ’079 patent and infringed asserted claims of the ’908 patent under the doctrine of equivalents.
- After an earlier damages award was set aside and retried, a second jury awarded about $140 million in reasonable-royalty damages, using the entire market value of the accused chips for the ’079 patent.
- Fairchild argued the accused chips included multiple valuable nonpatented features (including “jittering” to reduce electromagnetic interference), making EMVR improper.

## Issues

1. Whether substantial evidence supported the jury’s findings of literal infringement of the ’079 patent and infringement under the doctrine of equivalents of the ’908 patent.
2. Whether reasonable-royalty damages could be based on the entire market value of the accused chips under the entire market value rule when the product included significant nonpatented features.

## Decision

- Affirmed the judgments of infringement for both patents.
- Vacated the approximately $140 million damages award.
- Held EMVR was unavailable on this record because Power Integrations failed to prove the patented feature was the sole driver of customer demand for the accused chips.
- Remanded for further damages proceedings consistent with apportionment requirements.

## Legal Principles

- EMVR permits using an entire product’s value as the royalty base only when the patented feature creates the basis for customer demand or substantially creates the value of the component parts.
- When an accused multi-feature product includes other valuable, nonpatented features contributing to demand, the patentee must apportion damages to the value attributable to the patented invention rather than rely on total product revenue.
- Infringement verdicts are sustained on appeal if supported by substantial evidence, including competent expert and documentary proof, under the applicable standards for literal infringement and the doctrine of equivalents.

## Conclusion

The Federal Circuit left the liability verdict intact but required a new damages determination, rejecting use of the entire market value of the accused chips absent proof that the patented feature alone motivated purchases and instead requiring apportionment to the patented contribution.


Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 904 F.3d 965 (Fed. Cir. 2018)