Federal Circuit Finds District Court Mischarged the Jury on Induced Infringement

Federal CircuitPower Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., (Fed. Cir. Dec. 12, 2016)(Before Prost, Schall, and Chen, J.)(Opinion for the court, Chen, J.)

This case concerns ongoing disputes between Power Integrations and Fairchild Semiconductors. The companies sued each other in Delaware, each asserting infringement of multiple patents by the other. At issue were power supply controller chips used ubiquitously in modern electronics, the patents related to those chips, and how power is supplied and regulated from the upstream source to the downstream electronic device.

In affirming-in-part, reversing-in-part, and vacating-in-part, the Federal Circuit presented an eight-point bulleted summary of its findings. The Court found that the district court’s jury instructions incorrectly stated the law on inducement, and it vacated the jury’s inducement findings.  Additionally, the Court vacated a permanent injunction granted to Power Integrations. The case was remanded for further proceedings.

The jury found Fairchild liable for infringement of Power’s ’876 and ’851 patents under theories of literal infringement, doctrine of equivalents, and inducement. As to Power, the jury found infringement of Fairchild’s ’972 patent under the doctrine of equivalents. The jury found the asserted patents of both parties to be “not invalid” and made several findings of non-infringement. Post-trial, the district court granted a JMOL to Power, on its motion for direct infringement of the ’605 patent, and on its motion for a permanent injunction.

The Federal Circuit first addressed Power’s ’876 and ’851 patents. The Court found that the jury’s finding of validity was supported by substantial evidence. As to induced infringement (direct and indirect infringement were not appealed), the Court held that the jury instructions misstated the law. This prejudiced Fairchild because it “left the jury with the incorrect understanding that a party may be liable for induced infringement even where it does not successfully communicate with and induce a third-party direct infringer.” The Court also affirmed the lower court’s denial of JMOL as to induced infringement.

The Court next addressed Power’s ’605 patent, which the jury found was not anticipated. At trial, the parties agreed that the Maige reference had all of the claimed features, except “a variable current limit threshold that increases during the on time of the switch.” The Court found that Power’s expert admitted during his examination that Maige disclosed this limitation. Given that the validity inquiry boiled down to this one question, the jury lacked substantial evidence for its finding that Maige did not anticipate the asserted ’605 claims.

Regarding Fairchild’s ’972 patent, the Court affirmed both the claim construction and the jury’s finding of non-obviousness. The Court reversed the jury’s finding of infringement under the doctrine of equivalents, which contradicted the finding of no literal infringement by vitiating a claimed element. The finding of no literal infringement necessarily meant that there was only a single feedback signal; there was no second, “distinct” feedback signal as required in the claims. Consequently, the accused product could not have had a feature “equivalent” to something that was missing, i.e. the “distinct” second signal.

Induced infringement requires successful communication between the alleged inducer and the third-party infringer; it is not sufficient in itself that others directly infringed the asserted claims. There is no infringement under the doctrine of equivalents if the accused “equivalent” would eliminate a limitation from the claim.

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