Power Integrations v. Fairchild Semicond., et al

Filing 957

MEMORANDUM ORDER: IT IS HEREBY ORDERED that the '366 patent is DISMISSED WITHOUT PREJUDICE. Signed by Judge Leonard P. Stark on 12/8/17. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
POWER INTEGRATIONS, INC.,
Plaintiff,
v.
-Civil Action No. 04-1371-LPS
FAIRCHILD SEMICONDUCTOR
INTERNATIONAL, INC. and FAIRCHILD
SEMICONDUCTOR CORPORATION,
Defendants.

MEMORANDUM ORDER
At Wilmington this 8th day of December, 2017:
Pending before the Court is a dispute over the dismissal of U.S. Patent. No. 6,229,366
("'366 patent") from this action. 1 For the reasons stated below, IT IS HEREBY ORDERED
that the '366 patent is DISMISSED WITHOUT PREJUDICE.
1.

More than a dozen years ago, Power Integrations, Inc. ("Power") filed a complaint

alleging infringement of, among others, the '366 patent, which issued in May 2001. (See D.I. 1)
Eventually, at trial, Power asserted the '366 patent's independent claim 9 and dependent claim
· 14. (See, e.g., D.I. 415 at 4) Both claims incorporated the term "soft start circuit," which the

·1Defendants - Fairchild Semiconductor Int'l, Inc. and Fairchild S_emiconductor Corp.
("Fairchild")-moved in 2014 to dismiss the '366 patent. (See D.I. 855) The Court denied the
motion without prejudice (see D .I. 911) and later ordered the parties to re-brief the issue (see D .I.
922, 927). No formal motion to dismiss by either party is before the Court. However, the issue
of how to dismiss the '366 patent (with or without prejudice) was argued at a December 2016
hearing (see D.I. 953), and constitutes a dispute the Court must resolve notwithstanding the
parties' agreement that the Court lacks subject matter jurisdiction. See generally Nesbit v. Gears
Unlimited, Inc., 347 F.3d 72, 77 (3d Cir. 2003) ("[T]he court can raise sua sponte subject-matter
jurisdiction concerns.'').

1

Court originally construed as a 35 U.S.C. § 112 if 6 (now § 112(f)) means.:.plus-function
limitation. (See DJ. 231at28-33) A jury found that Fairchild infringed the asserted claims of
the '366 patent (see D.I. 415 at 4), and a subsequent jury found that Fairchild failed to prove that
those claims were invalid (see D.I. 555 at 3-4). On appeal, the United States Court of Appeals
for the Federal Circuit held that the Court had erred in its construction of "soft start circuit." See

-Power Integrations, Inc. v. Fairchild Semiconductor Int'!, Inc., 711F.3d1348, 1365-6fr(Fed.
Cir. 2013). The Federal Circuit remanded with instructions to re-construe the claims and assess
the effect of the construction on the validity of the claims.· See id. at 1381.
· 2.

In parallel with-the ongoing litigation in federal court, Fairchild pursued ex parte

reexamination at the U.S. Patent and Trademark Office ("PTO"). The PTO rejected claim 9 as
anticipated and claim 14 as obvious under 35 U.S.C. §§ 102 and 103. (See D.I. 857-2) In
response, Power filed an amendment, changing the "soft start circuit" term to "soft start circuit ·
means." (D.I. 857-3 at 4) The PTO allowed the amended claims and issued a reexamination
certificate on December 20, 2011. 2 (See D.I. 857-4; D.I. 857-5)
3.

·After the Federal Circuit's remand, Fairchild moved to dismiss the '366.patent ·

from the instant case. Fairchild argued that the Court lacked subject matter jurisdiction
following the reexamination amendments. (See D.I. 855, 856) Power responded that it was
premature to consider Fairchild's motion to dismiss because the Court had not yet construed the
reexamined claim term nor compared the scope of the original and reexamined claims. (See D.I.
874) At the same time, Power asked the Court to sever and dismiss with prejudice Power's

2

The amended '366 patent has been asserted by Power in subsequent litigation between
the parties. (See C.A. No. 12-540-LPS ("Power JI'') D.I. 11)

2

~.

infringement claim to the extent it sought damages for the pre-reexamination period. (See D.I.
873, 874 at 7-9)
4.

The Court denied both parties' motions without prejudice (see D.l. 911) and went

on to re-construe the pre-amendment '366 patent's "soft start circuit" term. The Court's new
construction of the pre-amendment "soft start circuit" term was broader than the Court's previous
means-plus-function construction. (See D.l. 918 at 11) Similarly, the new
"non-means-plus-function" construction of the pre-amendment "soft start circuit"term was
broader in scope than the construction the Court had (in the meantime) given to the
amended/reexamined "soft start circuit means" term (in the context of another case, Power V) . .
(See id.) Therefore, the scope of the pre-amendment and post-amendment claims is not

substantially identical. (See.id. at 11-12) The Court directed the parties to file a joint status
report outlining their position(s) as to the impact of these rulings. (See id. at 12)
5.

The parties' March 31, 2016 joint status report reflected continued disagreement.

After the Court informed the parties that it was "inclined to agree with Fairchild that it lacks
subject matter jurisdiction over ... the '366 patent" (D.I. 922), in subsequent briefing Power
appeared to adopt Fairchild's view as well (compare D.I. 921 at 2 with D.I. 939). 3
6.

The parties disagree, however, as to whether the Court can and should dismiss the

'366 patent with prejudice. Fairchild, citing Cooper Notification, Inc. v. Twitter, Inc., 545 F.
App'x 959 (Fed. Cir. 2013), argues that the Court retains the ability to enter a dismissal with
3

Power treats the Court's inclination as a conclusive ruling on the subject matter
jurisdiction inquiry and avoids any further assertion of its own position on the issue. (See, e.g.,
D.I. 939 at 1 ("Fairchild must live with the consequences of its arguments persuading the Court
that it lacks subject matter jurisdiction.")) The Court's statement of its inclination by oral order
was not a conclusive ruling.
3

prejudice. Power, relying on In re Orthopedic "Bone Screw" Products Liability Litigation, 132
F .3d 152 (3d Cir. 1997), contends that the Court's lack of subject matter jurisdiction requires a
dismissal without prejudice.
7.

The enforcement ofreexamined claims is governed by 35 U.S.C. § 307, which

incorporates 35 U.S.C. § 252's prescriptions for reissued claims. See 35 U.S.C. § 307(b) ("Any
proposed amended ... claim determined to be patentable and incorporated into a patent
following a reexamination proceeding will have the same effect as that specified in section 252
for reissued patents ...."); see also Fresenius USA, Inc. v. Baxter Int'!, Inc., 721 F.3d 1330,
1339 (Fed. Cir. 2013). Under§ 252, reissued patents have "the same effect and operation in law"
as if they were "originally granted in such amended form," but only ifthe "claims of the original
and reissued patents are substantially identical." 28 U.S.C. § 252. In other words, "[u]pon
reissue, original claims that are not reissued in identical form bee[ o]me unenforceable," as the
original claims are "dead." Fresenius, 721 F.3d at 1338 (internal quotation marks omitted).
8.

By incorporating§ 252, the reexamination statute similarly "restricts a patentee's

ability to enforce the patent's original claims to those claims that survive reexamination in
identical form." Id. at 1339 (internal quotation marks omitted). When a claim is amended
during reexamination "to render the claim valid, no suit can be maintained for the period prior to
the validating amendment." Id. "In sum, under either the reissue or reexamination statute, if the
PTO confirms the original claim in identical form, a suit based on that claim may continue, but if
the original claim is cancelled or amended to cure invalidity, the patentee's cause of action is
extinguished and the suit fails." Id. at 1340 (internal quotation marks omitted).
9.

The parties apparently agree that the only involvement the '366 patent has in the

4

instant action is limited to the assertion of claims 9 and 14 in their original, pre-amendment form.

(See D.I. 921 at 1 (Power: "Power Integrations' assertion of the reexamined '366 patent in
. the parties' later-filed litigation ... leaves only the question of pre-reexamination infringement in
this case"); id. at 2 (Fairchild: "Power Integrations has only ever asserted the original ... claims
of the '366 patent in this case.")) As noted; the Court has concluded that the reexamination
amendments to those claims effected a substantive change in claim scope. (See D.I. 918)
· Consequently, any cause of action predicated on the original claims was extingriished when the
reexamination certificate issued. See Fresenius, 721 F.3d at 1339-40; see also generally Target

Traininglnt'l, Ltd. v. ExtendedDisc N Am., Inc., 645 F. App'x 1018, 1023 (Fed. Cir. 2016)
(affirming dismissal where assignee did not amend infri.ngement contentions to.incorporate new
post-reexamination claims, and attempted to litigate only original, cancelled claims). 4
. 10.

Put another way, no "live case or controversy" or any "personal stake in the
1

outcome of the lawsuit" exists with regard to the '366 patent as it is presently asserted here .

.United States v. Huff, 703 F.3d 609, 611 (3d Cir. 2013) (internal quotation marks omitted).
·"Whenever an action loses its character as a present live controversy during the course of
litigation, federal courts are required to dismiss the action as moot." Cardpool, Inc. v. Plastic

Jungle, Inc., 817 F.3d 1316, 1324 (Fed. Cir. 2016) (internal quotation marks omitted). "[A]
dismissal for mootness is a dismissal for lack of jurisdiction." Target Training,. 645 F. App'x at
1025.
4

Power' s initial submissions on this· issue correctly suggested that the issuance of
substantively amended claims after reexamination did not necessarily divest the Court of subject ·
matter jurisdiction. (See D.I. 874 at 5-7; D.I. 921 at 1-2) But despite reference to possible postreexamination infringement of the '366 patent (see D.I. 921 at 1), Power has not moved to amend
its infringement contentions or otherwise assert the amended claims in the instant case.
5

11.

Fairchild nonetheless urges the Court to enter a dismissal of the '366 patent with

prejudice. In the absence of such a dismissal, Fairchild believes it "run[s] the risk that Power
.c,

Integrations games the system and seeks to harass Fairchild by filing another lawsuit on these
original claims." (D.I. 931 at 3) The Court is sympathetic to Fairchild's desire for a conclusive
disposition of the '366 patent's original claims. Still, when a court "determines that it lacks
subject matter jurisdiction, it cannot decide the case on the merits. . . . The disposition of such a
case will ... be without.prejudice." Bone Screw, 132 F.3d at 155; see also id. at 156 (holding
that federal courts lacking subject matter jurisdiction may onlyimpose sanctions that are
"collateral to the merits of the case"). 5
11.

The Court notes that Fairchild's expressed concerns may be ameliorated by

Power's representation that the Court lacks subject matter jurisdiction over the original claims.
(See D.I. 953 at 22) ("I don't see how the Court still has jur~sdiction over the '366 patent in [the

instant case] because the only dispute in that case was over the original claims~") Power is likely
estopped from arguing that any other court or proceeding could properly consider the '366
patent's original claims. See, e.g., Coors Brewing Co. v. Mendez-Torres, 562 F.3d 3, 9 (1st Cir.
2009) ("Although a dismissal for lack of jurisdiction does not bar a second action as a matter of

5

The Federal Circuit's non-precedential affirmance of this Court's.dismissal with
prejudice in Cooper does not expressly address the Third Circuit's decision in Bone Screw, and
may have been based on the particular conduct of the patentee (conduct which is absent here).
See 545 F. App 'x at 967 ("Given Cooper's proposed stipulation for dismissal with prejudice, the
Defendants' reliance on that stipulation, and Cooper's representations in open court [e.g.,·
"Cooper conceded that this trial was its ~me opportunity to bring clc:t}ms 1-11 and that "[i]t is
gone-now," that the Defendants would 'never have to face [claims 1-11] again,' and that the
Defendants 'don't have to ever worry about the '428 patent [claims 1-11], ~ .. ever again"'], the
district court was well within its discretion to dismiss the claims with prejudice.") (Federal
Circuit quoting district court transcript).
6

claim preclusion, it does preclude relitigation of the issues determined in ruling on the
jurisdiction question.") (internal quotation marks omitted), abrogated on other grounds by Levin

v. Commerce Energy, Inc., 560 U.S. 413 (2010); Springer v. Perryman, 2016 WL 1371077, at *3
(M.D. Ala. February 25, 2016) ("Because Plaintiffs claims continue to.be barred under

Rooker-Feldman, and Plaintiffs cause of action essentially seeks to re-litigate the issue of this
court'_s subject matter jurisdiction to consider the merits of Plaintiffs claims, Plaintiffs claims
are barred by collateral estoppel, or issue preclusion."). But the impact of today's dismissal (and
of the parties' litigation in general) on a future case is a matter that must await resolution in that
future case, should one be filed.
12.

. IT IS FURTHER ORDERED that the previous entry of final judgment in this

· action (seeD.I. 800) is VACATED with respect to infringement of the '366 patent. 6

HON. LE NARDP. STARK
UNITED STATES.DISTRICT JUDGE

6

'

The Col:111 does not perceive any opposition from Power to Fairchild's request that the
Court "formally vacate the finding of infringement of the '366 patent." (D.I. 931 at 3:-4; see
generally D .I. 921 at 1)
7