A jury of the North California District Court recently judged
Fairchild Semiconductor International Inc.
) guilty of willfully infringing two patents concerning power
supply integrated circuits held by rival firm
Power Integrations Inc.
). Power Integrations had filed other lawsuits concerning patent
infringement against Fairchild in the past as well.
The Federal District court has imposed $105 million in damages.
Based on the discovery of willfulness on the part of Fairchild
concerning the infringement, Power Integrations argue that this
penalty could be enhanced to triple the current level of damages.
The jury also rejected Fairchild's counterclaims alleging
infringement by Power Integrations.
Post the jury's favorable verdict, Power Integrations intends to
seek a permanent injunction forbidding Fairchild from selling
over 140 chips that it claims are implicated in the decision.
Thoroughly dissatisfied with the outcome, Fairchild feels the
judgment to be erroneous on the grounds of failing to account for
distinction in the indicted products, and intends to dispute
several facets of the verdict during post-trial review and
Patent controversies between the two companies can be traced back
to 2004. In a previous patent infringement case between the two,
a jury awarded Power Integrations $34 million in damages in 2006,
as well as permanent injunction against more than 100 infringing
However, in Mar 2013, the United States Court of Appeals for
the Federal Circuit revoked virtually the entire damages imposed
on Fairchild, negating the original verdict. The Federal Circuit
passed this judgment on the grounds that Power Integrations had
failed to cite any case law supporting its theory that damages
for induced infringement can be awarded for sales in foreign
markets, regardless of any connection to infringing activity in
FAIRCHILD SEMI (FCS): Free Stock Analysis
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Challenging the ruling, Power Integrations had filed a certiorari
petition, insisting that the Federal Circuit had set a perilous
precedent with the March ruling that forfeited damages based on
Fairchild's sales of semiconductor chips in Asia. Power
Integrations was adamant that the ruling defied the Supreme
Court's precedent that victims of infringement are entitled to
full compensation for their losses, and that whether the harm was
in domestic or foreign markets was immaterial.
Fairchild has intense disagreements with Power Integrations over
the legitimacy and scope of several patents that are the subject
of lawsuits, and intends to vigorously defend its own patents
against infringement. On the other hand, Power Integrations is
confident that the latest ruling and the accompanying penalties
will force Fairchild to review its business practices and begin
respecting intellectual property rights. For now, it seems that
the chain of suing and counter-suing between the rivals is set to
At present, Fairchild carries a Zacks Rank #4 (Sell), while Power
Integrations sports a Zacks Rank #3 (Hold). Some other stocks
that look promising in the Electronics-Semiconductor industry
NXP Semiconductors NV
ON Semiconductor Corp.
). While NXP sports a Zacks Rank #1 (Strong Buy), ON
Semiconductor carries a Zacks Rank #2 (Buy).