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Judge Stark decides Daubert motions in latest of long-standing dispute between Fairchild Semiconductor and Power Integrations

Chief Judge Leonard P. Stark recently decided the parties’ motions to preclude expert testimony in Fairchild Semiconductor Corporation v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Mar. 20, 2015).  Judge Stark granted Power Integrations’ motion as to Fairchild’s claim for damages for alleged inducement because Fairchild’s expert used the wrong date for his hypothetical negotiation.  Id. at 2.  In particular, Fairchild’s expert failed to consider a 2012 jury verdict in prior litigation between the parties in which the jury found no inducement of the patent-in-suit.  Id.  However, because both parties’ experts relied on the same incorrect date, Judge Stark gave both sides the opportunity to serve supplemental expert reports to correct the hypothetical negotiation date.  Id. at 3.

Judge Stark denied Fairchild’s motion to preclude Power Integrations’ technical expert finding that he did not import new limitations into two claim terms and provided adequate support for his opinion that the patent-in-suit was invalid under 35 U.S.C. § 112.  Id. at 3-4.  Judge Stark did, however, grant Fairchild’s motion as to Power Integrations’ damages expert.  Judge Stark determined that the expert improperly apportioned value between infringing and non-infringing products because he “did not analyze Fairchild’s accused products, relying instead on an apportionment based on [Power Integrations’] products, based on his belief that those products would have a relative value in the marketplace similar to what is exhibited by the Power Integrations products.”  Id. at 7 (internal quotation omitted).  Judge Stark also determined that the expert used an improper rule of thumb when beginning his analysis with “an assumption that up to 80% of value may be attributable to intellectual property, based on research showing that 80% of a high tech company’s value consists of intangible value, such as intellectual property.”  Id. at 8.

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