“Opticurrent’s allegations of gamesmanship carry real weight. ‘What Power Integrations is attempting to do is essentially get multiple bites at the apple.'” – Konrad Sherinian
On May 13, patent owner Opticurrent, LLC, filed an emergency motion for leave to file a supplemental motion for judgment in a patent infringement case it is fighting in the Northern District of California against high-performance semiconductor supplier Power Integrations, Inc. The motion, which ultimately asks the district court to render judgment on Power Integrations’ patent invalidity claims, alleges that the defendant has engaged in “gamesmanship” meant “to derail the Article III court system in the event of an adverse outcome on infringement by… manufacturing a race to an administrative outcome intended to circumvent the authority of this Court.”
Power Integrations Drops Invalidity Assertion
The case goes back to April 2016, when Opticurrent first filed charges against Power Integrations, alleging infringement of U.S. Patent No. 6958623, titled Three Terminal Noninverting Transistor Switch. Power Integrations followed with a counterclaim in which it asserted invalidity of the ‘623 patent, submitted expert discovery, and filed a motion for summary judgment of invalidity based on one of its alleged prior designs, but not based on any other reference contained within its invalidity contentions or expert report.
Power Integrations then informed the court that it wouldn’t be pursuing invalidity at trial in a pretrial conference dated February 11. According to trial transcripts cited in Opticurrent’s motion, counsel for Power Integrations stated that validity was “not something I think that should be being argued in effect to the jury to sort of bolster their infringement case.”
On February 25, a jury verdict was entered in the case, which found that Power Integrations infringed the ‘623 patent both literally and under the doctrine of equivalents. The jury awarded damages of $6.7 million as well as a 3% running royalty on sales of infringing products. On April 4, Power Integrations filed a motion to stay execution of judgment pending post-trial motions and appeal. Then, on May 3, Power Integrations filed a request for ex parte reexamination of the ‘623 patent at the U.S. Patent and Trademark Office (USPTO), citing much of the same prior art that it had presented in the district court proceedings. “This reveals itself to be a cynical attempt to generate a new battlefront to keep a validity fight alive and maintain a cloud over Plaintiff’s entitlement to fair compensation, long after Defendant waived and forfeited any argument of invalidity in this Court,” Opticurrent’s motion read. The only new prior art asserted in the USPTO reexam filing was a patent that was cumulative of another patent asserted by Power Integrations as prior art—the newly asserted patent was itself cited in the prior art patent that had already been asserted in the invalidity argument.
Opticurrent: Finality of District Court Proceeding is Key
Opticurrent’s motion pointed to distinctions between its case and case law from the Court of Appeals for the Federal Circuit in which the finality of district court infringement judgments were left in question by administrative proceedings at the USPTO, leading to invalidity. For example, CAFC procedural rulings leading up to 2014’s Versata Computer Industry Solutions v. SAP AG seemed to reopen a district court’s judgment and injunction order to modification after the Patent Trial and Appeal Board (PTAB) found that infringed patent claims were invalid. Although the patent owner abandoned injunctive relief, the Federal Circuit affirmed the damages award in the case. In 2013’s Fresenius USA v. Baxter International, the Federal Circuit reversed a district court’s judgment as a matter of law (JMOL) that Fresenius hadn’t proven the invalidity of claims from two patents asserted by Baxter. While there were also reexamination proceedings leading to the invalidity of Baxter’s patent claims that ran parallel to the judicial proceedings, invalidation came prior to a final district court judgment. Further, Opticurrent noted that the outcome in Fresenius had been contentious and en banc rehearing of the case was barely denied in a 6-4 vote. Opticurrent pointed to Judge Pauline Newman’s dissent in Fresenius, which cautioned against the use of Executive Branch proceedings to override the authority of the courts.
Opticurrent also cited a pair of PTAB decisions that were recently designated as precedential to contend that the USPTO declined validity review when such review would have been an inefficient use of resources. In NHK Spring v. Intri-Plex Technologies and Valve Corporation v. Electronic Scripting Products, the PTAB denied petitions to institute inter partes review (IPR) proceedings under 35 U.S.C. § 314 because such proceedings would have been inefficient. In Valve Corporation, the inefficiency was posed by multiple petitions using similar arguments, but in NHK Spring, the advanced stage of district court proceedings involving similar arguments of invalidity resulted in the PTAB panel denying institution.
Will the Court Recognize Reexamination Attempt as Gamesmanship?
There are significant differences between IPRs, which are adverse proceedings between parties and must be filed within one year of being served with a claim for patent infringement, and ex parte reexaminations, which can be requested at any time and are proceedings between the USPTO and the patent owner. Power Integrations is well within its rights to request a reexamination even after the district court judgment, said Konrad Sherinian of Konrad Sherinian Law Offices. However, he said that Opticurrent’s allegations of gamesmanship carry real weight. “What Power Integrations is attempting to do is essentially get multiple bites at the apple, which is likely why Power Integrations opposed entry of judgment on validity on February 11—they were setting up to get their second bite at the apple in case they lost at trial, which they did,” Sherinian said.
Sherinian added that, while the district court might not require Power Integrations to withdraw its request for reexamination, the court will likely apprehend the defendant’s actions as gamesmanship. “Power Integrations’ excuse as to why it did not pursue infringement at trial (the supposed ‘weakness of Opticurrent’s infringement case’) is laughable,” Sherinian said. While all litigation involves a form of gamesmanship to some extent, such as attempts to mislead other parties on primary arguments or the existence or discoverability of certain evidence, it’s likely that in this case the court will grant final judgment, including on validity. “It is fairly clear that Power Integrations dropped its invalidity defense, and therefore, the court will likely find that Opticurrent is entitled to judgment on validity,” he said. “If that happens, the outcome of the reexamination will likely not impact Power Integrations’ obligation to pay the judgment; rather, the only way for Power Integrations to get out of that would be to prevail on a post-trial motion or at appeal.”
Power Integrations Responds
IPWatchdog contacted Power Integrations seeking comment on Opticurrent’s allegations, but the company doesn’t comment on litigation issues. On May 17, Power Integrations filed an opposition to Opticurrent’s emergency motion in which it argued that the district court shouldn’t enjoin the reexamination request, nor should it allow extra briefing on the reexamination, Opticurrent’s motion for judgment on invalidity or Power Integrations’ motion to stay execution. Power Integrations contended that Opticurrent failed to timely renew its motion on invalidity within 28 days after the jury was discharged, as required under Federal Rule of Civil Procedure 50(b).
Regarding the motion to stay execution, Power Integrations alleged that the reexamination has nothing to do with the stay request and that any argument about reexamination as a basis to vacate the infringement just “is speculation at this point.”
“In any event, reexamination will help determine whether PI even owes any money, not whether there is a risk that it will be unable to pay,” said Power Integrations’ opposition brief.