Free Answering Brief in Opposition - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation, INTERSIL AMERICAS, INC., a Delaware corporation and INTERSIL CORPORATION, a Delaware corporation Plaintiff, v. POWER INTEGRATIONS, INC., a Delaware corporation, Defendants. OPPOSITION TO MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO TRANSFER THIS CASE TO DELAWARE COME NOW the Plaintiffs and file this their response to Defendant Power Integrations' ("PI") request to dismiss this action or transfer it to Delaware, and in support thereof would show the Court the following. I. INTRODUCTION Plaintiff "Intersil"1 is the owner of the patent-in-suit, U.S. Patent No. 5,264,719 (the "'719 Patent"), and Fairchild Semiconductor Corp. ("Fairchild"), is the exclusive licensee of that patent. While Defendant PI moves to dismiss the action, it does not even contend that plaintiff Intersil lacks standing. For this reason alone, the motion to dismiss must be denied. PI also simply ignores the clear language of the license agreement between Intersil and Fairchild explicitly granting Fairchild exclusive rights. Pursuant to that agreement, Fairchild has complete power to exclude PI from practicing the `719 Patent and therefore has standing to sue as a coplaintiff with Intersil. PI's motion to dismiss must be denied for this reason as well. Further, this case should not be transferred to Delaware. The parties in the two pending actions are not the same, as Intersil is not party to the Delaware dispute. The actions do not even

CIVIL ACTION NO. 2:06-cv-151

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Intersil Americas and Intersil Corp.

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involve the same patents or products. This case involves Intersil's and Fairchild's `719 Patent, and the accused products are PI devices. In the Delaware action, by contrast, PI asserts four of its own patents against Fairchild devices. Obviously there is no overlap. Moreover, the

Delaware action has been pending for close to two years and in just a few months, trial on the four PI patents at issue in Delaware will be underway. Thus, consolidation of the two actions would not be practical, given the disparate stages of litigation. There is no reason to transfer this distinct action to Delaware when the dispute can and should be litigated efficiently in this venue. II. ARGUMENT A. PI's Motion To Dismiss Should Be Denied. 1. Dismissal Of The Action Is Inappropriate Because PI Does Not Dispute That Intersil--The Owner Of The `719 Patent--Is Properly A Plaintiff

PI does not contest that Plaintiff Intersil--the patent owner--has standing to sue. PI admits that Intersil is the owner of the `719 Patent. [PI Brief, at 5 ("[l]egal title appears to have been held at all times by Intersil (or Intersil's predecessor Harris Corporation) . . ."); Ramsey Decl. (filed herewith), Exs. 1-3] Further, PI recognizes that, as the owner of the asserted patent, Intersil has standing. [PI Brief, at 5 ("a patentee may bring an action for patent infringement")] This point is well-settled. See 35 U.S.C. §281 ("patentee" may bring infringement action). Nowhere in its brief does PI even remotely contest Intersil's status as a plaintiff in this case. Yet, despite this critical concession, PI nonetheless requests dismissal of the entire action with prejudice. [PI Brief, at 7; PI Proposed Order] Given PI's recognition that Intersil has standing, such relief is entirely inappropriate. For this reason alone, PI's motion must be denied. 2. Fairchild Has Standing To Sue Because It Is An Exclusive Licensee And Has Sued Jointly With Intersil

Fairchild is an exclusive licensee, therefore it has standing to sue along with Intersil as a joint plaintiff. It is well-settled that "a licensee may possess sufficient interest in the patent to have standing to sue as a co-plaintiff with the patentee." Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1552 (Fed. Cir. 1995). Such a licensee "is usually an `exclusive licensee.'" Id. (emphasis

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added). Exclusive licensees possessing "all substantial rights"2 under the patents may sue even without joining the patentee. Exclusive licensees possessing less than "all substantial rights" may sue as long as the patentee is joined as a co-plaintiff. See Prima Tek II, LLC v. A-Roo Co., 222 F.3d 1372, 1377, 1381 (Fed. Cir. 2000) ("the patent owner must ordinarily join, in any infringement action, an exclusive licensee who possesses less than all substantial rights in the patent."); Abbott Lab. v. Diamedix Corp., 47 F.3d 1128, 1132-1133 (Fed. Cir. 1995) (establishing licensee standing to sue if patentee joined as plaintiff by licensee); Philadelphia Brief Case Co. v. Specialty Leather Prods. Co., 145 F. Supp. 425, 429 (D. N.J. 1956) (same). PI egregiously misstates this standard asserting that a licensee may only sue when "a party obtains an exclusive license to a patent and holds `all substantial rights' under the patent." [PI Brief, at 4, 7, 10-11] While this is the appropriate standard for determining whether an exclusive licensee may sue without joining the patentee--it is not the appropriate test for whether a licensee may sue with the patentee. Even if less than "all substantial rights" under the patent are held by the exclusive licensee, it may sue as co-plaintiff with the patentee. The critical question in determining whether Fairchild has standing in a suit brought with Intersil is whether Fairchild obtained the "the right to exclude others [i.e. PI] from making, using or selling the patented invention . . ." Rite-Hite Corp., 56 F.3d at 1552. In the words of one case relied upon by PI, "it is the licensee's beneficial ownership of a right to prevent others from making, using or selling the patented technology that provides the foundation for co-plaintiff standing . . ." Ortho Pharma. Corp. v. Genetics Institute, Inc., 52 F.3d 1026, 1032 (Fed. Cir. 1995); see also Abbott Lab., 47 F.3d at 1131 (relied upon by PI; "the transfer of the exclusive right to sue was `particularly dispositive' of the question whether [plaintiff] was authorized to bring suit without joining [patentee]"); Good Sportsman Mktg. LLC v. Testa Assocs., LLC, 2005 U.S. Dist. LEXIS 29182, *4-5 (E.D. Tex. 2005) (same).
2

"All substantial rights" means: "the right to exclude others from making, using, or selling the invention in the United States, the right to transfer, and the right to sue." NOMOS Corp. v. ZMED, Inc., 175 F. Supp. 2d 96, 98 (D. Mass. 2001). An exclusive licensee receiving "all substantial rights" is tantamount to an assignee.

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There can be no dispute that Fairchild possesses the exclusive right to exclude PI from making, using or selling the patented invention of the `719 Patent, and therefore has standing to sue as a co-plaintiff with Intersil. Pursuant to its license agreement with Intersil, Fairchild possesses the "sole and exclusive right" to prevent PI from making, using or selling the invention and to control PI's economic activity regarding practice of the invention. [Ramsey Decl., Ex. 4 at ¶1.2, ¶3)] This right to exclude is complete, as is clear from the patent license agreement: 3.1. . . Intersil grants to Fairchild the sole and exclusive right, exclusive even as to Intersil, to enforce the Patents against POWI3, to assert, litigate and prosecute claims of Infringement under the Patents against POWI, including without limitation in any U.S. federal court or before the International Trade Commission, and to seek all equitable, injunctive, monetary and other relief and to collect for later distribution under Paragraph 1.2 any and all past damages in connection with Infringement of the Patents by POWI, and to settle and compromise any disputes with POWI related to the Patents. Except as provided herein, the Parties agree that only Fairchild shall have the authority to threaten, commence, maintain or settle any claim suit or proceeding based upon Infringement of the Patents (or other trespass or similar action relating to the Patents and the inventions therein claimed) by POWI. [Ramsey Decl., Ex. 4 at ¶3)] By this agreement, Intersil has clearly promised that no party other than Fairchild will be granted the right to exclude PI from practicing the patent "even as to Intersil." Fairchild possesses two of the three "substantial rights"--specifically, "the right to exclude others from making, using, or selling the invention in the United States," and "the right to sue." NOMOS Corp. v. ZMED, Inc., 175 F. Supp. 2d 96, 98 (D. Mass. 2001). Therefore, Fairchild is an exclusive licensee, upon which standing is conferred to sue PI jointly with the patent owner Intersil. PI incorrectly argues that Fairchild purportedly "has no exclusive right to keep others from making, using or selling products making use of the patented technology." [PI Brief at 6] As the foregoing makes clear, this disingenuous assertion must be rejected. PI incorrectly relies on a number of cases in which the licensee failed to join the patent owner as a co-plaintiff. See Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 40, 44 (1923) ("The plaintiff below could not bring such a suit for past infringements without
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Power Integrations ("POWI")

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joining with it the owner of the patent when the infringements were committed."; dismissing on the ground that "the owner of the patent is not a party to this bill. . ."); Abbott Lab., 47 F.3d at 1132-1133 (licensee failed to join patentee as voluntary plaintiff); Prima Tek II, LLC, 222 F.3d at 1376, 1381-1382 (same; issue was "whether any of the Appellees in this suit had standing to maintain an infringement action . . . without joining . . . the owner of all six patents in suit."); Philadelphia Brief Case Co., 145 F. Supp. at 429-430 (same). By contrast, the facts are

fundamentally different here, given that the patentee Intersil is obviously joined as a co-plaintiff with exclusive licensee Fairchild. Thus, under the foregoing authority, standing is appropriate. PI also makes a flawed attempt to rely on authority stating that a non-exclusive "right to sue" clause does not provide standing. See e.g. Ortho, 52 F.3d at 1034. However, the transfer of exclusive rights in this case far exceeds the mere non-exclusive "right to sue" at issue in the authority cited by PI. Indeed, Intersil granted Fairchild the complete and exclusive right to prevent PI from making, using or selling the patented invention, even as to Intersil. Fairchild has the right, with respect to PI, to "enforce the Patents," "to assert, litigate and prosecute claims of Infringement under the Patents" in any context, "to seek all equitable, injunctive, monetary and other relief" to "collect . . . any and all past damages," "to settle and compromise any disputes" with PI that are "related to the Patents," and "to threaten, commence, maintain or settle any claim, suit or proceeding based upon Infringement of the Patents." [Ramsey Decl., Ex. 4 (Patent License Agreement, ¶3)] In other words, Fairchild has the complete right to exclude PI from practicing the `719 Patent and to control PI's activity involving practice of the invention. This is true "even as to Intersil." It is not merely the right to sue, but the right to exclude in every respect within a particular domain--i.e. the domain of PI's practice of the invention. This constitutes a transfer of "beneficial ownership of some of the patentee's proprietary rights," which indisputably confers standing. Ortho, 52 F.3d at 1034.4 For these reasons Intersil and Similarly, a number of cases relied upon by PI are distinguishable because the patentee retained the same right as was purportedly granted exclusively to the licensee. See e.g. Ortho, 52 F.3d at 1033-34 (patentee retained the same "exclusive" rights licensed to the licensee); Rite-Hite Corp., 56 F.3d at 1552-1553 (not even clear that patent rights were being licensed, licensee had "no right . . . to exclude anyone from making, using, or selling the claimed invention" and patentee -54

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Fairchild have standing to sue, and PI's motion to dismiss should be denied. As admitted by PI, Intersil was, until March 30, 2006, the owner of all rights in the `719 Patent. At that time, Intersil transferred to Fairchild the right to exclude PI and completely control its activity regarding the `719 Patent. This was true "even as to Intersil." Rhetorically, PI's logic would mean that Intersil and Fairchild have no standing to sue or enforce the patent. Intersil could not independently sue PI without Fairchild, since it transferred to Fairchild the sole and exclusive rights to enforce the patent against PI. At the same time, Fairchild could proceed alone, but case law suggests that the better course is to join the patent owner. Prima Tek II, L.L.C., 222 F.3d at 1381 (underlying policy of joinder rule is to prevent duplicative litigation by rights holders against a single accused infringer). Essentially, PI's logic would result in

somehow granting PI freedom from suit since neither the owner nor the exclusive licensee would have standing to sue. This is obviously not the law. Joinder of the patent owner and exclusive licensee affords standing to both to proceed against a defendant. B. The Court Should Not Transfer This Case To Delaware

PI's request to transfer this case to the District of Delaware should also be denied. This case involves entirely different parties and issues than are involved in the pending Delaware action. Transferring the case to Delaware would be contrary to the interests of justice and efficiency. Therefore, pursuant to 28 U.S.C. §1404(a), PI's motion should be denied and this case should proceed in this Court. 1. The Parties And Issues Before The Delaware Court Are Substantially Different Than The Parties And Issues Involved In The Instant Case

Contrary to PI's assertions, there is not substantial overlap between the instant matter and the case pending in the District of Delaware. First, the parties are completely different. PI brought the Delaware action against Fairchild Semiconductor Int'l, Inc and Fairchild retained the same rights it had licensed). By contrast, here Intersil has granted Fairchild the exclusive right to prevent PI from making, using or selling the patented invention, Intersil has not retained those rights for itself and it cannot license any other party to do the same. [Ramsey Decl., Ex. 4 at ¶3] The fact that Intersil retained the right to sue other parties unrelated to PI is of no consequence to the question of whether Fairchild has standing to sue PI, which it clearly does.

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Semiconductor Corp.

The instant action, by contrast, is brought by Intersil and Fairchild

Semiconductor Corp. against PI. Thus, Intersil is not a party to the Delaware action and Fairchild Semiconductor Int'l, Inc. is not a party to the instant action. [Ramsey Decl., Exs. 6, 7] Moreover, there is no significant overlap of issues between the two actions. In the Delaware action, PI asserts U.S. Patent Nos. 6,107,851, 6,249,876, 6,229,366 and 4,811,075 against two different Fairchild entities and there are no other patents asserted by any party in the counterclaims. [Id., Exs. 8, 9] By contrast, in the instant case, Intersil and Fairchild

Semiconductor Corp. have sued PI for infringement of a completely different patent--the `719 Patent. [Id., Ex. 7] Obviously, none of the patents-in-suit overlap between the cases. Such distinct patents, with distinct claim language and specifications, require independent determinations of claim construction, infringement and validity. See e.g. ResQnet.com, Inc. v. LANSA, Inc., 3f46 F.3d 1374, 1384 (Fed. Cir. 2003) (independent claim construction required for different patents, even where language was similar).5 Further, because different defendants are involved in the two actions, completely different products are alleged to infringe. Therefore, the jury trial in the Delaware action that will occur in October and December of this year will resolve only issues concerning the four PI patents asserted in that case, but will not resolve any issues concerning construction, infringement, validity or enforceability of the `719 Patent asserted in the instant action. PI does not even contend that the Delaware action involves infringement of the `719 Patent. However, it concocts an outlandish argument that somehow the validity of the `719 Patent will be addressed in the Delaware action. This is untrue. The issues at stake in the PI attempts to argue that the cases substantially overlap based on the mere fact that a single claim of the `719 Patent uses most of the same wording as is used in one of the patents in suit in Delaware--Patent No. 4,811,075. [PI Brief, at 8, 11, Michael E. Jones Decl., Ex. H] However, the claim language is not identical. Given that the claim language, specifications and file histories are different between the patents, the precise scope of the claims necessarily must be determined independently. See Datamize, Inc. v. Fid. Brokerage Servs., LLC, 2004 U.S. Dist. LEXIS 29100, *17-18 (E.D. Tex. 2004). Even where patents in two actions had identical specifications and similar language, no "substantial overlap" of issues was found and transfer was denied. Id. The Court observed that: "the Federal Circuit has held that where there are even small differences in the language of claims in related patents, the claim language in each patent should be construed independently." Id.
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Delaware action are the infringement, validity and enforceability of PI's patents, including U.S Patent 4,811,075 with respect to which the `719 Patent is cited as prior art. [Ramsey Decl., Ex. 7, 8] The Delaware action will not involve any findings regarding the validity or enforceability of the `719 Patent, as no complaint, answer or counterclaim in that action asserts infringement of the `719 Patent. [Id.] In fact, the Delaware court is without jurisdiction to decide the validity or enforceability of the `719 Patent. See Flexi-Mat Corp. v. Dallas Mfg. Co., 2006 U.S. Dist. LEXIS 19528, *39-40 (D. Mass. 2006) ("Without a case or controversy, a district court has no jurisdiction to make a declaratory judgment on the validity of claims."; court had no jurisdiction to decide validity of claims not alleged to be infringed). The `719 Patent is cited by Fairchild in the Delaware action as one of its prior art references. However, the primary prior art assertion actually involves not the `719 Patent, but rather its "parent" patent. But that does not confer jurisdiction to decide the validity of the `719 Patent where it is not alleged to be infringed. For these reasons, there is absolutely no potential for inconsistent rulings between the cases. Simply put, the two cases involve distinct patents, which will require independent claim constructions and determinations of infringement, validity and enforceability. See e.g. Datamize, Inc. v. Fid. Brokerage Servs., LLC, 2004 U.S. Dist. LEXIS 29100, *17-18 (E.D. Tex. 2004) (fact that patent asserted in second action might be relevant to claim construction of patent asserted in first action did not support transfer because patent in first action not asserted in second action).6 Therefore, as discussed in detail below, PI's motion to transfer to Delaware must be denied. 2. The "First-To-File" Rule Does Not Support Transfer To Delaware

It is "well-established" that a plaintiff's choice of forum is "highly esteemed" and should be given deference. Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *23-24. The plaintiff's choice of a forum is "a paramount consideration in any determination of transfer request, and that choice should not be lightly disturbed." Young v. Armstrong World Indus., 601 F. Supp. 399, Also, the fact that a claim in a second filed action could be asserted as a defensive theory in the first filed action does not support transfer of the second filed action to the venue in which the first action was filed. See Rooster Prods. Int'l, Inc. v. Custom Leathercraft Mfg. Co., 2005 U.S. Dist. LEXIS 1643, 5-7 (W.D. Tex. 2005) (whether a claim could be brought as a permissive counterclaim is not the test to determine whether transfer is appropriate).
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401 (N.D. Tex. 1984).7 The plaintiff's choice of forum is particularly important where, as is the case here, plaintiffs allege that defendant has engaged in infringing activity within that forum. See Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *23-25. Intersil's and Fairchild's decision to bring this action in the Eastern District of Texas should be respected. An exception to this general principle is the "first-to-file rule," by which a later-filed action may be transferred to a court in which a first-filed action is pending. However, such transfer is only appropriate when the actions are so duplicative or involve such substantially similar issues that one court should decide both actions. See Rooster Prods. Int'l, Inc. v. Custom Leathercraft Mfg. Co., 2005 U.S. Dist. LEXIS 1643, *5-7 (W.D. Tex. 2005). Here, because (a) the instant matter is the "first filed" action and (b) there is not substantial overlap of issues between the two actions, the first-to-file rule supports proceeding in Texas instead of Delaware. PI's motion to transfer based on the first-to-file rule is disingenuous and must be denied. To begin with, this action is the first and only action in which the `719 Patent is asserted to be infringed by anyone. Therefore, contrary to PI's assertions, this case is the "first-filed" action. The case Cummins-Allison Corp. v. Glory Ltd., 2004 U.S. Dist. LEXIS 13839 (E.D. Tex. 2004) is instructive. There, certain patents were asserted in an earlier-filed Illinois case and entirely different, but "related," patents were asserted in a later-filed Texas case involving the same parties. The Texas court found that under these circumstances, the Texas case was "firstfiled" with respect to the patents asserted in Texas and denied transfer on that basis: The Court finds that this case is the first-filed case and should proceed in this Court. Although the patents are related and might involve the interpretation of identical claim terms, the patents are different patents than those in suit in the initial Illinois case. Id. Likewise, because the `719 Patent is not asserted in Delaware, the instant case is the "first Further, it has been observed that: "the judicial system inherently provides a plaintiff with his choice of forum: The existence of [forum choices] not only permits but indeed invites counsel in an adversary system, seeking to serve in his client's interests, to select the forum that he considers most receptive to his cause. The motive of the suitor in making this choice is ordinarily of no moment: a court may be selected because its docket moves rapidly, its discovery procedures are liberal, its jurors are generous, the rules of law applied are more favorable, or the judge who presides in that forum is thought more likely to rule in the litigant's favor." McCuin v. Texas Power & Light Co., 714 F.2d 1255, 1261-62 (5th Cir. 1983).
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filed" action regarding that patent. Indeed, here the patents are not even "related," thus the rule applies even more forcefully. Therefore, the action should proceed in this court. Second, the issues in the Delaware action and the instant action are so divergent that the "first-to-file" rule does not support transfer. To determine whether there is substantial overlap of issues for purposes of the first to file rule, it is necessary to engage in a "comparison of the pleadings" to assess whether there is overlap in the "claims." Rooster Prods. Int'l, Inc., 2005 U.S. Dist. LEXIS 1643 at *6. A comparison of the Delaware complaint and the complaint in the instant action reveals that the four patents-in-suit in Delaware are not asserted in this case, nor is the sole patent at issue here asserted in Delaware. [Ramsey Decl., Exs. 6, 7] On that basis alone, it is evident there is no substantial overlap of issues.8 Therefore, the first-to-file rule does not apply and PI's motion to transfer should be denied. See id. (denying motion to transfer where non-Texas action and Texas action involved different claims); Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *3, 7, 34 (denying transfer where non-Texas action involved the "parent" patent which was different, but related to the "child" patent asserted in Texas action). As discussed above, the resolution of infringement, validity and enforceability of the four patents in suit in the Delaware action will in no way determine or resolve issues of infringement, validity and enforceability of the `719 Patent at issue in the instant action. [See supra Section B.1.] The fact that the content of each suit will require independent development weighs against transfer. See id. at *10 (fact that "overall content of each suit" is "very capable of independent development" weighed against transfer). Because there are different defendants, different

accused products and different patent claims, requiring independent construction, there is no substantial overlap of issue and transfer is inappropriate. See id. at *11 (where "case involves different defendants, different patent claims, different claim scopes" and "different accused products," no substantial overlap of issues). PI's motion to transfer should be denied.
8

For this reason, the case Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403 (5th Cir. 1971), relied upon by PI at pages 10-11 of its brief, is inapposite. In the Mann case the same patent was the subject of a declaratory action of non-infringement in New York and an affirmative infringement action in Texas. By contrast, here there is no overlap of asserted patents whatsoever.

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3.

It Would Be Unjust And Inefficient To Transfer This Case To Delaware

A case should not be transferred where doing so would be contrary to "the convenience of parties and witnesses" or contrary to the "interest of justice." 28 U.S.C. §1404(a). Similarly, even where the first-to-file rule might otherwise be applicable, transfer is inappropriate where it would be "unjust or inefficient." Genentech v. Eli Lilly & Co., 998 F.2d 931, 938 (Fed. Cir. 1993). As PI correctly observes, courts consider "all relevant factors" to determine the propriety of transfer. [PI Brief, at 13] The party moving for transfer--in this case PI--bears the burden of proving that relevant factors support transfer. Network-1 Sec. Solutions, Inc. v. D-Link Corp., 2006 U.S. Dist. LEXIS 16545 (E.D. Tex. 2006) ("The movant bears the burden of proof in demonstrating that transfer is warranted."). If the moving party fails to carry that burden, the motion to transfer must be denied. In the instant case, it would be highly inefficient and contrary to the convenience of the parties and witnesses, the interest of justice and public policy to transfer the action to Delaware. PI has failed to carry its burden of proving otherwise. For all of these reasons, PI's motion to transfer must be denied. a. Transfer Is Inappropriate Because It Would Be Inconvenient For The Parties And Witnesses

Courts consider the convenience and availability of parties and witnesses in determining whether transfer is appropriate. See e.g. Genentech, 998 F.2d at 938. In this case, it would be inconvenient for parties and witnesses to proceed in Delaware. Two of the four parties-- plaintiff Intersil and defendant PI--are located in California. [Ramsey Decl., Ex. 6 at ¶¶3-4] As PI points out, the inventor of the `719 Patent resides in Florida.9 Further, third-party Harris Corporation (from which Intersil acquired the asserted patent) is headquartered in Melbourne Florida. [Id., Ex. 9] Similarly, the prosecuting attorney Charles E. Wands is located in Orlando Florida. [Id., Ex. 10] Obviously these parties and witnesses are much closer to Texas than

The fact that plaintiff Fairchild has a principal place of business in Maine, closer to Delaware does not weigh in favor of transfer, given that Fairchild itself has chosen Texas as a forum. See Datamize, Inc., LLC, 2004 U.S. Dist. LEXIS 29100 at *26 (Where a plaintiff has chosen the forum, there is no inconvenience to plaintiff's own witnesses and transfer is inappropriate.)

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Delaware, increasing the convenience and reducing the cost of obtaining attendance at trial.10 At the very least, there is no more connection to Delaware than to Texas. Accordingly, PI has not carried its burden on this factor and the plaintiff's choice of forum should control. See Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *27-28 (proximity of majority of parties to chosen forum weighed against transfer). PI does not provide any evidence to the contrary, but merely professes not to be aware of any fact witnesses in Texas. This is a complete failure by PI to carry its burden on this factor and weighs against transfer. See Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *26-27 (rejecting argument that Defendant was "not aware of any" witnesses in Texas; "Because Defendants are unaware of any Datamize or defense witnesses located in Texas does not mean none exist. A generalized argument such as this does not overcome Defendants' burden."). For all of these reasons, this factor supports denial of PI's motion. b. Transfer Is Inappropriate In Light Of The Accessibility And Location Of Sources Of Proof

The accessibility and location of proof is also a relevant factor to consider. Network-1 Sec. Solutions, Inc., 2006 U.S. Dist. LEXIS 16545 at *6. The documentary evidence of two of the three parties, Intersil and PI are likely to be located in California. Similarly, the documentary evidence in the possession of the inventor and prosecution counsel is likely to be located in Florida. These sources of proof are closer to Texas than Delaware, weighing against transfer. c. Transfer Is Inappropriate Because There Is No Possibility Of Consolidation With The Delaware Action And Transfer Would Only Result In Delay And Prejudice

Courts also consider the possibility of consolidation, in determining whether transfer is appropriate. See e.g. Genentech, 998 F.2d at 938. There is no possibility of consolidation in Delaware of the action pending there and the instant action. The Delaware action involves four patents not asserted in the instant case and the patent asserted here is not asserted in Delaware.
10

The cost of obtaining attendance of witnesses at trial was not even addressed by PI in its motion. Therefore PI has not met its burden on this factor. See Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *28 (finding same)

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Staggering inefficiencies would result from any attempt to consolidate the cases. The Delaware action has progressed very nearly to trial. Substantial discovery has been conducted regarding infringement, validity and enforceability of the four patents at issue in that case. Summary judgment motions have been heard and ruled upon. Pre-trial materials have been exchanged. This activity has been with respect to four patents that are not involved in the instant dispute. To inject into the Delaware case an entirely new cause of action for infringement of the `719 Patent would require litigation of infringement, invalidity and enforceability of the `719 Patent, which will not otherwise be addressed. To do so would require a continuance of the scheduled trial until the parties were able to litigate all of the issues in the case. Given how close the Delaware action is to trial, the parties would only be prejudiced by delay and burdened by significant inefficiencies. See Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *28-29 (where issues of delay did not weigh clearly in favor of defendant, defendant failed to carry burden and transfer inappropriate). Accordingly, PI has not carried its burden on this factor. d. Transfer Is Inappropriate Because The Actions Involve Different Parties

Courts consider whether the real parties in interest are the same in two actions, in determining whether transfer is appropriate. See e.g. Genentech, 998 F.2d at 938. The Delaware action does not involve the real parties in interest in this case. In particular, as PI concedes in its brief, plaintiff Intersil in this action is not a party to the Delaware action. The fact that Intersil has communicated with Fairchild about the Delaware case and responded to a third-party discovery subpoena, does not make it party to the Delaware action. Intersil is nothing but a bystander in the distinct, unrelated dispute in Delaware. In fact, the only appearance Intersil made in Delaware was to file a motion to quash on the basis that discovery related to the instant action should be left to and decided by this Court. [Ramsey Decl., ¶15] This is simply not a basis to argue that Intersil has somehow acquiesced to the primacy of the Delaware court; indeed, it suggests the opposite. Transfer to Delaware would be unjust and inefficient to Intersil, which has chosen the Eastern District of Texas as its desired forum. Therefore, PI has failed to

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carry its burden and this factor weighs against transfer. e. Matters Of Public Interest Weigh Against Transfer

Several public interest factors are considered in determining the propriety of transfer, including: "(1) the relative backlog and other administrative difficulties in the two jurisdictions; (2) the fairness of placing the burdens of jury duty on the citizens of the state with the greater interest in the dispute; (3) the local interest in adjudicating local disputes; and, (4) the appropriateness of having the case in a jurisdiction whose law will govern the dispute in order to avoid difficult problems in conflicts of laws." In re Triton Secs. Litig., 70 F. Supp. 2d 678, 688 (E.D. Tex. 1999). Proceeding in Texas would pose no administrative difficulties. The substantial

experience of this Court with patent cases and the particularized rules of procedure adopted in this venue for patent cases will lead to great efficiencies. Further, as discussed, because the cases involve different parties, different patents and different accused products there is not substantial overlap of issues between the two cases. Accordingly, there will be no inefficiencies related to inconsistent rulings or duplicative efforts if transfer is denied. Datamize, Inc., 2004 U.S. Dist. LEXIS 29100 at *30-31. Given the differences between the cases, PI's assertion that pre-trial preparations in this action would be "wasted" pending the final outcome of the Delaware action is incorrect. [PI Brief, at 14]11

Further, the public interest factors of jury duty burden and local interest in adjudicating local disputes weigh in favor of proceeding with the case in Texas. Id. at *32. The infringement of the `719 Patent has occurred in Texas, therefore citizens in the District have an interest in
11

Even if particular findings in the Delaware case were assumed to be relevant to issues in this case, that fact is still not a basis for transferring this action to Delaware, as no inefficiency would result from proceeding in Texas. The bifurcated Delaware trial will occur in October and December of this year. Findings from that trial will be available for consideration by the Court or jury in this action well before any dispositive motions are heard or trial proceeds in this case. If this action, which is only beginning, were transferred to Delaware, the situation would be precisely the same. The findings from the imminent Delaware trial would be available to a Delaware court or jury at the same time they would be available if this case proceeds in Texas. Thus, contrary to PI's assertions, no administrative efficiencies would result from transfer, nor are there any inefficiencies imposed by proceeding in Texas.

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resolving the dispute. PI has failed to show that there is any greater connection with Delaware. PI has produced no evidence of any greater burden on a potential jury in the Eastern District of Texas, a lesser burden on any jury in Delaware, or a greater interest among the citizens of Delaware to try this case. Finally, PI does not contend that any choice of law conflicts that would arise if this case is not transferred. These factors supports denial of PI's motion as well. III. CONCLUSION For the foregoing reasons, this Court should deny PI's motion to dismiss for lack of standing and should deny PI's motion to transfer this case to Delaware. Respectfully submitted by, ________________________________ Carl R. Roth, Texas Bar No. 901984225 [email protected] Michael C. Smith, Texas Bar No. 900641877 [email protected] THE ROTH LAW FIRM, P.C. 115 North Wellington, Suite 200 P.O. Box 876 Marshall, Texas 75671 Tel: (903) 935-1665 Fax: (903) 935-1797 Attorneys for Plaintiffs, FAIRCHILD SEMICONDUCTOR CORPORATION, INTERSIL CORPORATION, INTERSIL AMERICAS, INC. SHORE CHAN BRAGALONE, L.L.P. Michael Shore, Texas Bar No. 18294915 [email protected] Jeffrey R. Bragalone, Texas Bar No. 02855775 [email protected] 325 North St. Paul, Suite 4450 Dallas, Texas 75201 Tel: (214) 593-9110 Fax: (214) 593-9111 Attorneys for Plaintiffs, INTERSIL CORPORATION, INTERSIL AMERICAS, INC. - 15 -

OF COUNSEL: G. Hopkins Guy, III (SBN 124811) Bas de Blank (SBN 191487) Orrick, Herrington & Sutcliffe LLP 1000 Marsh Road Menlo Park, CA 94025 (650) 614-7400

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CERTIFICATE OF SERVICE The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court's CM/ECF system per Local Rule CV-5(a)(3) this 26th day of July, 2006. Any other counsel of record will be served by facsimile transmission and/or first class mail.

____________________________________ Michael C. Smith

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS

FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation, INTERSIL AMERICAS, INC., a Delaware corporation and INTERSIL CORPORATION, a Delaware corporation Plaintiff, v. POWER INTEGRATIONS, INC., a Delaware corporation, Defendants.

JURY CIVIL ACTION NO. 2:06-cv-151

PLAINTIFFS' AMENDED COMPLAINT Plaintiffs FAIRCHILD SEMICONDUCTOR CORPORATION (hereinafter, "Fairchild"), INTERSIL AMERICAS, INC. and INTERSIL CORPORATION, (Intersil Americas, Inc. and Intersil Corp. are collectively "Intersil") by and through their undersigned counsel, hereby alleges as follows: THE PARTIES 1. Fairchild Semiconductor Corporation is a Delaware corporation with its principal

place of business in South Portland, Maine. 2. Intersil Corporation is a Delaware corporation with its principal place of business

in Milpitas, California. 3. Intersil Americas, Inc. is a Delaware corporation with its principal place of

business in Milpitas, California. 4. Power Integrations, Inc. is a Delaware is a Delaware corporation with its principal

place of business in San Jose, California.

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JURISDICTION AND VENUE 5. This is an action arising under the patent laws of the United States, Title 35 of the

United States Code. This court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1331 and 1338(a). 6. Upon information and belief, this Court has personal jurisdiction over the

defendant because Power Integrations sells the accused devices within this district. 7. Upon information and belief, venue is proper in the Court pursuant to 28 U.S.C.

§ 1391(b) and (c) and § 1400 as the defendant is subject to personal jurisdiction in this district. FIRST CAUSE OF ACTION INFRINGEMENT OF U.S. PATENT NO. 5,264,719 8. herein. 9. U.S. Patent No. 5,264,719 (the "`719 Patent"), entitled High Voltage Lateral The allegations of paragraphs 1-7 are incorporated as though fully set forth

Semiconductor Device, duly and lawfully issued on November 23, 1993 and was assigned to Harris Corporation. A true and correct copy of the `719 Patent is attached hereto as Exhibit A. 10. Upon information and belief, on or about September 27, 1999 the `719 Patent was A true and correct copy of that

assigned by Harris Corporation to Intersil Corporation. assignment is attached as Exhibit B. 11.

Upon information and belief, on or about April 14, 2006, Intersil Corporation

changed its name to Intersil Communications, Inc. A true and correct copy of the restated certificate of incorporation is attached as Exhibit C. 12. Upon information and belief, on or about April 14, 2006 the `719 Patent was

assigned by Intersil Communications, Inc. to Intersil Americas, Inc. A true and correct copy of that assignment is attached as Exhibit D. 13. On or about March 30, 2006, Fairchild Semiconductor Corporation and Intersil

Corporation entered into a Patent License Agreement that gave Fairchild the right to assert the

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`719 Patent against Power Integrations. A redacted copy of that Patent License Agreement is attached as Exhibit E. 14. On or about May 17, 2006, Fairchild Semiconductor Corporation, Intersil

Corporation, and Intersil Americas, Inc. entered into a Supplemental Agreement effective March 30, 2006 that gave Fairchild the right to assert the `719 Patent against Power Integrations. A true and correct copy of that Supplemental Agreement is attached as Exhibit F. 15. Upon information and belief, Power Integrations has been and is now infringing

the `719 Patent, both literally and under the doctrine of equivalents, by making, using, selling, offering for sale, and importing devices and products in the United States covered by one ore more claims of the `719 Patent. 16. Upon information and belief, Power Integrations has been and is now inducing

infringement and contributing to the infringement of the `719 Patent, both literally and under the doctrine of equivalents, by inducing or contributing to the making, using, selling, offering for sale, and importing by others devices and products in the United States covered by one or more claims of the `719 Patent. 17. Power Integrations' infringement has caused irreparable injury to Fairchild and

Intersil and will continue to cause irreparable injury until Power Integrations is enjoined from further infringement by the Court. PRAYER FOR RELIEF WHEREFORE, FAIRCHILD and INTERSIL pray for the following relief: A. Judgment by the Court that Power Integrations directly infringes the `719 Patent; B. Judgment by the Court that Power Integrations induces or contributes to others' infringement of the `719 Patent; C. Preliminary and permanent injunctive relief pursuant to 35 U.S.C. § 283 enjoining Power Integrations, its officers, agents, servants, employees, successors, assigns and all other persons or entities acting in concert or participation with Power Integrations or on Power Integrations' behalf from further infringement of the `719 Patent; -3US_WEST:23083832.3

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D. Money damages sustained as a result of Power Integrations' infringement of the `719 Patent; E. Costs and reasonable attorneys' fees incurred in connection with this action pursuant to 35 U.S.C. § 285; and, F. Such other relief as the Court finds just and proper.

DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Fairchild Semiconductor Corporation and Intersil Corporation hereby demand a trial by jury on this action.

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Respectfully submitted by,

________________________________ ORRICK, HERRINGTON & SUTCLIFFE LLP G. Hopkins Guy, III (SBN 124811) Bas de Blank (SBN 191487) 1000 Marsh Road Menlo Park, CA 94025 (650) 614-7400 Carl R. Roth, Texas Bar No. 901984225 [email protected] Michael C. Smith, Texas Bar No. 900641877 [email protected] THE ROTH LAW FIRM, P.C. 115 North Wellington, Suite 200 P.O. Box 876 Marshall, Texas 75671 Tel: (903) 935-1665 Fax: (903) 935-1797 Attorneys for Plaintiffs, FAIRCHILD SEMICONDUCTOR CORPORATION, INTERSIL CORPORATION, and INTERSIL AMERICAS, INC. SHORE CHAN, L.L.P. Michael Shore, Texas Bar No. 18294915 [email protected] Jeffrey R. Bragalone, Texas Bar No. 02855775 [email protected] 325 North St. Paul, Suite 4450 Dallas, Texas 75201 Tel: (214) 593-9110 Fax: (214) 593-9111 Attorneys for Plaintiffs, INTERSIL CORPORATION, and INTERSIL AMERICAS, INC.

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CERTIFICATE OF SERVICE The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court's CM/ECF system per Local Rule CV-5(a)(3) this 19th day of May, 2006. Any other counsel of record will be served by facsimile transmission and/or first class mail.

____________________________________ Michael C. Smith

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation, INTERSIL AMERICAS, INC., a Delaware corporation and INTERSIL CORPORATION, a Delaware corporation Plaintiff, v. POWER INTEGRATIONS, INC., a Delaware corporation, Defendants.

CIVIL ACTION NO. 2:06-cv-151

ORDER DENYING POWER INTEGRATIONS' MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO TRANSFER THIS CASE TO DELAWARE ON THIS DAY, came on to be considered Power Integrations, Inc.'s Motion to Dismiss, or in the Alternative, to Transfer This Case to Delaware in the above-styled and numbered cause. After considering said motion, the Court is of the opinion that said motion should be DENIED.