Free Motion to Dismiss - District Court of Delaware - Delaware

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

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

C.A. No. 2-06CV-151 JTW

POWER INTEGRATIONS' MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO TRANSFER THIS CASE TO DELAWARE Fairchild does not have standing to prosecute this case because it does not own U.S. Patent No. 5,264,719 ("the '719 patent") and is not the exclusive licensee of the patent. Fairchild's recent efforts to buy a cause of action on the '719 patent from Intersil are insufficient as a matter of law, and no amount of hand-waving on the part of the plaintiffs can cure that fatal defect. Therefore, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, Power Integrations hereby moves to dismiss this case for lack of standing. In the alternative, Power Integrations asks that the Court transfer this action to the District of Delaware, where the parties are already engaged in a dispute regarding the '719 patent. Specifically, the parties are seeking to determine whether the '719 patent was conceived before a Power Integrations patent asserted in the Delaware action. The Delaware case is set for trial this year, and all parties in the present suit are involved in the Delaware matter--Power

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Integrations is the Delaware plaintiff, Fairchild Semiconductor is the defendant, and Intersil is a third party alleging prior inventorship and working with Fairchild to attempt to prove prior inventorship. As a result, this District is not the proper venue in which to address the '719 patent. I. FACTUAL BACKGROUND On October 20, 2004, Power Integrations, Inc. ("Power Integrations") filed suit against Fairchild Semiconductor Corporation and Fairchild Semiconductor International, Inc. (collectively "Fairchild") in the District Court for the District of Delaware, alleging infringement of four U.S. patents. [See Declaration of Mike Jones ("Jones Decl.") Ex. A.1] Fairchild claims that one of the four patents, U.S. Patent No. 4,811,075 ("the '075 patent"), is invalid in view of the '719 patent, the only patent asserted in this case. Fairchild and Power Integrations have taken extensive discovery with respect to the '719 patent in the Delaware action, and the dispute in Delaware turns on who was the first to invent the technology in the '075 and '719 patents. A Delaware jury will resolve this critical issue later this year, as the trial on validity issues is set to begin on December 4. [Ex. B (Pretrial Conference Tr.) at 30-31.] During the course of the Delaware litigation, Fairchild bought a license "to enforce" the '719 patent against a single entity: Power Integrations. [See Fairchild's Amended Complaint ("Amended Complaint") Ex. E.] By the terms of the March 30, 2006 agreement, Intersil granted Fairchild "the sole and exclusive right . . . to assert, litigate and prosecute claims of [i]nfringement under the ['719] patent[] against [Power Integrations]." [Amended Complaint Ex. E (Patent License Agreement of Mar. 30, 2006 ("PLA")) at §§ 1.2, 3.1.] However, Fairchild's hunting license does not provide any underlying right beyond the right to sue--it

1

All citations are to the accompanying Declaration of Mike Jones, unless noted otherwise.

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does not grant Fairchild the exclusive right to make, use, or sell the alleged invention of the '719 patent.2 On April 11, 2006, Fairchild issued a press release announcing the license and the institution of this suit, noting that Fairchild "recently secured exclusive rights to assert the ['719] patent against Power Integrations." [Ex. C (April 11, 2006 Press Release ­ Fairchild Semiconductor Files Patent Infringement Lawsuit Against Power Integrations, Inc.).] On May 18, 2006, Intersil and Fairchild executed a Supplemental Agreement attempting to modify the PLA to make yet another entity, Intersil Americas, the original party to the PLA. [Amended Complaint Ex. F (Agreement of May 18, 2006).] None of these actions conferred standing on Fairchild. II. LEGAL AUTHORITY To have standing to assert patent infringement, "the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the lawsuit." Paradise Creations, Inc. v. U V Sales, Inc., 315 F.3d 1304, 1309 (Fed. Cir. 2003). Where the plaintiff lacks a cognizable injury at the time it filed suit, such defect in standing cannot be cured after the inception of the lawsuit. Id. at 1310. In order to bring an action for damages resulting from infringement, the patentee must not only have legal title to the patent, but must have been its owner at the time of the infringement. Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 41 (1923); Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 (Fed. Cir. 1991) ("[O]ne seeking to recover money damages for infringement of a United States patent . . . must have held the legal title to the patent during the time of the infringement."); Heidelberg Harris, Inc. v. Loebach, 145 F.3d 1454, 1458 (Fed. Cir. 1998) ("[A] plaintiff cannot sue for patent infringement occurring

2

As part of a broader cross-license with Intersil, Fairchild took a license to practice the '719 patent in certain limited capacities several years ago. But that license is not exclusive and, as Fairchild has implicitly acknowledged by entering into at least two later agreements specific to the '719 and Power Integrations, has no bearing on the instant dispute. Plaintiffs have not asserted--and cannot assert-- that the earlier Fairchild-Intersil license in any way confers standing in this case.

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prior to the time the plaintiff actually obtained legal title to the asserted patent."); Mas-Hamilton Group v. LaGard, Inc., 156 F. 3d 1206, 1210 (Fed. Cir. 1998) (only the owner of the patent at the time of the infringement can bring an action for damages resulting from that infringement) (dictum). A patentee may divide its "bundle of rights" and convey, or share, the right to sue infringers. The patentee may, by instrument in writing, assign, grant, convey (1) the entire patent, (2) an undivided part or share of the entire patent, or (3) all rights under the patent in a specified geographical region. Waterman v. Mackenzie, 138 U.S. 252, 255 (1891). Such transfers constitute an assignment, and they vest the assignee with title in the patent and a right to sue infringers, either as sole plaintiff or as co-plaintiff depending on the nature and extent of the rights conferred. Id. However, a transfer of less than one of these three interests is a mere license, giving the licensee no title in the patent, and no right to sue for infringement in the licensee's own name. Id. Fairchild has none of these three interests. A narrow exception to the rule that only patentees and successors in interest may sue for infringement applies when a party obtains an exclusive license to a patent and holds "all substantial rights" under the patent. See Textile Productions, Inc. v. Mead Corp., 134 F.3d 1481, 1483-85 (Fed. Cir. 1998); Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875 (Fed. Cir. 1991). To establish independent standing as an exclusive licensee, though, a party must have received both the right to exclude others from making, using, or selling the patented technology and the patent holder's promise that no other party may practice the patented technology. Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1552 (Fed. Cir. 1995). However, this narrow exception does not apply to non-exclusive licensees; even if the patent holder is a party to the suit, a non-exclusive licensee does not have independent standing to sue for infringement. Kalman v. Berlyn Corp., 914 F.2d 1473, 1481-82 (Fed. Cir. 1990) 4

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(stating a non-exclusive licensee lacks standing to sue for infringement even if joined with the patent holder and further noting that no "licensee who joins the patentee [has] standing to sue an infringer"). Furthermore, a non-exclusive licensee who has not been granted the right to exclude others has no legally recognized interest that would entitle it to bring or join an infringement action. Abbott Lab. v. Diamedix Corp., 47 F.3d 1128, 1131 (Fed. Cir. 1995). A licensee may only bring an infringement suit to protect a property interest it received from the patentee. See Ortho Pharmaceutical Corp. v. Genetics Institute, Inc., 52 F.3d 1026, 1034 (1995) ("[I]t 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."). Thus, a contract clause cannot by itself grant standing to a licensee if the licensee would otherwise not have standing to bring the suit. Id. ("[A] right to sue clause cannot negate the requirement that . . . a licensee must have beneficial ownership of some of the patentee's proprietary rights."). III. ARGUMENT A. Fairchild Does Not Have Standing and Cannot Sue Power Integrations on the '719 Patent.

Fairchild has no standing to sue for infringement because Fairchild is not, and never was, the patentee or successor in interest to the '719 patent, and at no time has Fairchild held all substantial rights to the patent. Patent standing rules are strict: a party seeking to recover for alleged patent infringement must either have held legal title to the patent at the time of the alleged infringement, or have been assigned the right to recover for that infringement by the legal title holder together with an assignment of all substantial rights under the patent. Crown Die & Tool Co., 261 U.S. at 41; Ortho Pharm., 52 F.3d at 1034. Only a patentee may bring an action for patent infringement, and Fairchild is not the patentee. Legal title appears to have been held at all times by Intersil (or Intersil's predecessor Harris Corporation), making Intersil the only party 5

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with any right to recover for alleged patent infringement, regardless of Fairchild's purported "license to enforce" the patent against Power Integrations. To overcome the rule that only patentees and successors in interest may sue for infringement, Fairchild would need an exclusive license and would need to demonstrate a sufficient proprietary injury to one of the rights that flows from the patent. Rite-Hite, 56 F.3d at 1552. In essence, though, Fairchild has a "bare license," because it has no exclusive right to keep others from making, using, or selling products making use of the patented technology, and Fairchild suffers no legally cognizable harm when a third-party makes, uses, or sells the patented technology. See Abbott, 47 F.3d at 1131. As noted above, a bare licensee has no standing at all. See Rite-Hite, 56 F.3d at 1552; Ortho Pharm., 52 F.3d at 1034. Fairchild therefore has no legally recognized interest that entitles it to bring or join an infringement action. Intersil's contractual grant of the "exclusive right to sue" is not sufficient to confer standing to Fairchild. "A patentee may not give a right to sue to a party who has no proprietary interest in the patent." Ortho Pharm., 52 F.3d at 1034 (collecting cases describing non-exclusive licensees lack standing to enforce a patent); Rite-Hite, 56 F.3d at 1553. See also Phila. Brief Case Co. v. Specialty Leather Prods. Co., 145 F. Supp. 425, 429-30 (D.N.J. 1956), aff'd, 242 F.2d 511 (3rd Cir. 1957) (contract clause cannot give right to sue where licensee would otherwise have no such right). The Patent License Agreement attempts to convey to Fairchild "the sole and exclusive right . . . to assert, litigate and prosecute claims of [i]nfringement under the ['719 and related] patents against [Power Integrations]" [Amended Complaint Ex. E (Patent License Agreement of Mar. 30, 2006) at §§ 1.2, 3.1], but the license agreement simply cannot supersede the legal requirement that the licensee have all substantial rights in order to have standing to sue for infringement.

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The Federal Circuit has explicitly rejected the possibility that a patentee could grant a hunting license along the lines of the license contemplated between Fairchild and Intersil. See Prima Tek II, LLC v. A-Roo Co., 222 F.3d 1372, 1381 (Fed. Cir. 2000). The court in Prima Tek II further noted that "[i]n evaluating whether a particular license agreement transfers all substantial rights in a patent to the licensee, we pay particular attention to whether the agreement conveys in full the right to exclude others from making, using and selling the patented invention in the exclusive territory." Id. at 1379 (emphasis in original, citations omitted). Just last month, the Federal Circuit affirmed these principals: [T]he plaintiff must be within the class of persons legally protected by the statute under which the individual seeks relief. For example, in Ortho Pharmaceutical Corp. v. Genetics Institute, Inc., 52 F.3d 1026, 1030-31 (Fed.Cir.1995), we held that nonexclusive patent licensees lack Article III standing to sue for infringement because "economic injury alone does not provide standing to sue under the patent statute . . . . a licensee must hold some of the proprietary sticks from the bundle of patent rights," otherwise the licensee "suffers no legal injury from infringement and, thus, has no standing . . . ." See also Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1345 (Fed.Cir.2001) ("[A] nonexclusive license . . . confers no constitutional standing on the licensee under the Patent Act to bring suit or even to join a suit with the patentee because a nonexclusive (or `bare') licensee suffers no legal injury from infringement."). Willis v. Government Accountability Office, --- F.3d ----, 2006 WL 1329929 (Fed. Cir. May 17, 2006). The Court should therefore decline to expend its resources on Fairchild's ill-conceived distraction from the Delaware case. Moreover, Intersil's presence in this suit does not overcome Fairchild's lack of independent standing. Adding the patent holder as a co-plaintiff would only defeat a challenge on the grounds of standing if Fairchild had the exclusive rights to make, use and sell the patented technology, Abbott, 47 F.3d at 1131, but as Fairchild does not have such exclusive rights, it lacks standing to bring a cause of action for infringement. The Court should therefore dismiss this action for lack of standing.

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B.

If the Court Does Not Dismiss This Action, It Should Transfer the Case to Delaware to Be Resolved In The Court Which is Already Addressing the Patent-in-Suit.

In the alternative, Power Integrations asks the Court to transfer this action to the United States District Court for the District of Delaware, where a previously filed case involving the same parties and an identical dispute regarding who was first to invent the technology is already pending. There is a substantial overlap between this action and the Delaware case set for trial this December, as the outcome of both suits depends on the Delaware case's inventorship findings, and both the Fifth Circuit and the Federal Circuit both follow a first-to-file rule for cases having substantial overlap. Further, the interest of justice suggests transfer under the federal venue statute. Therefore, if the Court does not dismiss this case outright, it should transfer to the matter to Delaware. 1. The Key Issue With Respect to the Sole Patent-in-Suit, an Inventorship Dispute, is Already Before the Delaware Court.

In support of its invalidity claim with respect to the '075 patent in Delaware, Fairchild asserted that the '719 patent, the only patent in this case, is key invalidating prior art to the '075 patent. [Ex. D ('719 patent claim chart from Fairchild's invalidity contentions).] Fairchild and Power Integrations have taken extensive discovery with respect to the '719 patent, and the dispute in Delaware turns on who was the first to invent the technology in the '075 and '719 patents. The Delaware jury will resolve this critical issue later this year. The '719 Patent was filed on May 24, 1991, over four years after the '075 Patent's April 1987 filing date. During prosecution of the '719 patent, the Applicant copied large portions of the claims of the '075 patent into the '719 patent. [Ex. E at I-000228 ("[A]lthough not identically copied, [the claim] is considered to be generic to the invention defined in claim 1 of U.S. Patent No. 4,811,075 to Eklund." (underlining in original)).] A brief comparison of claim 8 8

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of the '719 Patent to claim 1 of the '075 Patent demonstrates this copying of the '075 patent claim language. [Appendix 1; Ex. F-G.] Thus, the same questions regarding conception and inventorship that are central to the Delaware trial would also arise in this suit. 2. The First-To-File Rule Compels the Transfer of This Case.

In patent cases, "the forum of the first-filed case is favored, unless considerations of judicial and litigant economy, and the just and effective disposition of disputes, require otherwise." Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993), overruled on other grounds, Wilton v. Seven Falls, Inc., 515 U.S. 277 (1995); accord Save Power Ltd. v. Syntek Finance Corp., 121 F.3d 947, 950 (5th Cir. 1997) ("The Fifth Circuit adheres to the general rule that the court in which an action is first filed is the appropriate court to determine whether subsequently filed cases involving substantially similar issues should proceed.") The Federal Circuit regards the application of the first-to-file rule as an issue that "is important to national uniformity in patent practice." Genentech, 998 F.2d at 937. Application of the rule requires a three-part analysis by the court in a later-filed action: 1. The court must confirm that the case before it was filed later than an earlier case in another district. Genentech, 998 F.2d at 937; accord Syntek Finance, 121 F.3d at 950-51. The court must then determine whether the earlier-filed case is likely to raise issues that substantially overlap with the case on its own docket. Syntek Finance, 121 F.3d at 950-51. If so, the court must transfer the action before it to the first-filed court unless it finds that it would be "unjust or inefficient" to do so. Genentech, 998 F.2d at 938; accord Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403 (5th Cir. 1971) (transfer required absent "compelling" reasons to favor later action).

2.

3.

After the second case is transferred, the first-filed court decides whether that later action "must be dismissed, stayed, or transferred and consolidated." Sutter Corp. v. P&P Indus., Inc., 125

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F.3d 914, 920 (5th Cir. 1997). In favoring transfer of related cases, the rule is designed to avoid the waste and duplication that would result from piecemeal resolution of similar issues. West Gulf Maritime Assoc. v. ILA Deep Sea Local 24, 751 F.2d 721, 728-29 (5th Cir. 1985); cf. Optical Recording Corp. v. Capitol-EMI Music, Inc., 803 F. Supp. 971 (D. Del. 1992) (proceeding with later-filed case because the Delaware court was already familiar with the technology and patents at issue in both cases). a. The Delaware Action Is The First-Filed Action.

Power Integrations filed suit against Fairchild on October 20, 2004, in Delaware, over 17 months before the current action was brought. Fairchild has not only answered the complaint in the Delaware case, but the parties have already conducted extensive discovery, are finished with claim construction, and have completed technical expert discovery. In fact, the parties recently had a pre-trial conference, and the Delaware Court provided trial dates for later this year (September for some issues and December for others). [Ex. B at 30-31.] b. There Is Substantial Overlap in the Subject Matter of the Patents at Issue.

Cases do not need to have exactly the same subject matter to meet the "substantial overlap" test. "[R]egardless of whether or not the suits here are identical, if they overlap on the substantive issues, the cases would be required to be consolidated in . . . the jurisdiction first seized of the issues." Mann Mfg., 439 F.2d at 408 n.6; see also Syntek Finance, 121 F.3d at 950 ("The rule does not, however, require that cases be identical.") The Fifth Circuit has addressed the meaning of "substantial overlap" in the context of patent litigation in Mann Mfg. 439 F.2d at 405-408. There, Goodrich sued in the Southern District of New York seeking a declaratory judgment that a number of its products did not infringe a patent owned by Mann. Id. at 405. After Goodrich commenced that action, Mann 10

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sued Goodrich and Hortex on the same patent in the Western District of Texas and then sued on another related patent. Id. at 405-406. The Fifth Circuit acknowledged that these two cases involved distinct patents, but despite the difference in patent claims, the Court found that the cases shared substantial issues and held that the New York court was the proper court to determine how to proceed with respect to the later added patent. Id. at 407-08. Here, the Delaware and Texas cases bear even more similarities than in Mann Mfg., as both cases address the same technology and share disputes regarding nearly identical claims. The similarity is particularly evident when comparing claim 8 from the'719 Patent against claim 1 of the '075 Patent (shown side-by-side in Appendix 1). The parties have taken extensive fact and expert discovery on the question of inventorship in the Delaware case, and the Delaware Court has already issued a claim construction order. [Ex. H (Claim Construction Order).] The identical question of inventorship, likely determinative for validity purposes, will be decided at trial in Delaware later this year on the basis of the same fact witnesses, documents, and expert testimony that would apply here. As such, to proceed with both the Texas and Delaware cases separately would result in precisely the kind of wasteful duplication of time and effort that the first-to-file rule is designed to prevent. West Gulf, 751 F.2d at 729 ("The concern manifestly is to avoid the waste of duplication . . . and to avoid piecemeal resolution of issues that call for a uniform result."). Allowing this case to proceed in Texas would also risk conflicting outcomes on a single issue. To avoid this confusion and injustice, Power Integrations asks this Court to transfer the action to Delaware. c. There Are No Compelling Circumstances That Justify Disregarding the First-To-File Rule.

Once the first-to-file rule applies, the issues should be decided in the first-filed suit, unless it would be "unjust or inefficient" to do so. Genentech, 998 F.2d at 938. In deciding 11

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whether justice and efficiency require disregarding the first-to-file rule, the Federal Circuit considers such factors as: (1) the convenience and availability of witnesses, (2) the absence of jurisdiction over all parties, (3) the possibility of consolidation with related litigation, and (4) whether the first-filed case involves the real parties in interest. As discussed below, none of these factors weighs against transfer to Delaware. First, the convenience and availability of witnesses do not favor the Eastern District of Texas. All three parties in this case are Delaware corporations, with their principal places of business alleged to be in either California or Maine. All of the patents in question, including those from the Delaware case, list the inventors' residence as either California or Florida. In fact, Power Integrations is not aware of a single fact witness located in the state of Texas. Second, there are no jurisdictional reasons to disregard the first-to-file rule. Not only are Fairchild and Intersil Delaware corporations, but Fairchild also answered and counterclaimed in the Delaware case without asserting a defense based on a lack of personal jurisdiction or on the inconvenience of that forum. As such, Fairchild has agreed to jurisdiction and waived any right to object. See Golden v. Cox Furniture Mfg. Co., Inc., 683 F.2d 115, 118 (5th Cir. 1982) (party waives right to object to personal jurisdiction if it does not make motion under Rule 12 or assert defense in answer); see also Fed. R. Civ. P. 12(h)(1). Intersil responded to subpoenas in the Delaware case and, as a Delaware corporation, cannot contest personal jurisdiction in Delaware. The third factor also provides no basis for declining this transfer request, as there is no related litigation in the Eastern District of Texas with which the two actions could be consolidated. In fact, the opposite is true. As to the fourth factor, whether the first-filed case involves the real parties in interest, defendants will likely argue that Intersil is not a party to the Delaware action. However, Intersil has been working with Fairchild in Delaware case, shares

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local counsel with Fairchild in Delaware, and has produced documents and things related to the '719 patent in Delaware. Intersil has also participated in and paid the inventor of the '719 patent to sit for a deposition, in addition to preparing and presenting alleged corroborating witnesses on the '719 patent. As such, Intersil has been an active participant in the Delaware litigation and is well aware that the inventorship contest between the '075 patent and the '719 patent will be decided in the Delaware case. 3. The Interest of Justice Requires Hearing this Action in Delaware.

Even if this Court does not transfer using the first-to-file rule, it should transfer the case to the District of Delaware because it is a more convenient and cost effective place to resolve the instant dispute. The potential for inconsistent rulings from the plaintiffs' forum shopping imposes significant inconvenience on Power Integrations, and to the public at large, in the form of uncertainty. Further, having presided over the Delaware case, the Delaware court will be intimately familiar with the technology and issues in the present suit, including specifically the inventorship contest, which plaintiffs apparently want to challenge all over again here. In addition, the need to re-litigate the inventorship contest imposes an inconvenience and burden on Power Integrations. a. Cases Are Transferred at the Court's Discretion, Focusing on Convenience and Justice.

A district court may transfer any civil case "[f]or the convenience of parties and witnesses, in the interest of justice, . . . to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). In exercising its discretion to transfer a pending case, courts consider "all relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different

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forum." Peteet v. Dow Chemical Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (internal quotations and citations omitted). b. Both Convenience and Justice Favor Transfer to Delaware.

The potential for inconsistent findings imposes a great inconvenience on Power Integrations and burdens the public at large. The Delaware case will proceed to judgment first, and that judgment is res judicata. Because the parties can rely on the Delaware court's findings, in particular the determination on the inventorship issue, all preparations made meanwhile to relitigate the issues in this District would be wasted. Absent such consistent treatment, it could take years to untangle the various issues presented with multiple constructions and inventorship contentions on these related patents. Indeed, given the stage of the Delaware case, it is likely that issues from that case would be pending on appeal at the same time that plaintiffs ask this Court to decide those same issues. The public would have no idea what it could and could not do in this field. Moreover, plaintiffs have known for over a year that inventorship would be decided in the Delaware case, and they could have filed a counterclaim asserting the '719 patent against Power Integrations early in the Delaware case. Instead, they chose to wait until the Delaware case was nearly completed, and then filed this suit in another forum, despite the fact that rulings and findings from the Delaware case are important, and in some cases determinative, in their present suit. Finally, having presided over the Delaware case, the District of Delaware will be intimately familiar with the technology and issues in the present suit, including specifically claim constructions and the inventorship contest. The Delaware court will also be in the best position to decide evidentiary issues such as what evidence, rulings, and stipulations from the old case

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may be employed in what ways in the present suit. This Court should therefore transfer the instant case to Delaware under Section 1404(a), to the extent it does not do so under the firstfiled rule or does not dismiss the suit outright for lack of standing. III. CONCLUSION For the reasons stated above, this Court should grant Power Integrations' motion to dismiss for lack of standing or, in the alternative, transfer the case to Delaware to be resolved by a Court already dealing with the '719 patent and familiar with the technology at issue in both cases. Dated: June 19, 2006 Respectfully submitted,

OF COUNSEL Frank E. Scherkenbach Fish & Richardson P.C. 225 Franklin Street Boston, Massachusetts 02110-2804 Telephone: (617) 542-5070 Facsimile: (617) 542-8906

By: /s/ Michael E. Jones Michael E. Jones State Bar No. 10929400 mikejones@potterminton POTTER MINTON A Professional Corporation 110 N. College, Suite 500 Tyler, TX 75702 Telephone: (903) 597-8311 Facsimile: (903) 593-0846 Attorneys for Defendant POWER INTEGRATIONS, 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) on June 19, 2006. Any other counsel of record will be served by facsimile transmission and first class mail. /s/ Michael E. Jones Michael E. Jones

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE POWER INTEGRATIONS, INC., a Delaware corporation, Plaintiff, v. C.A. No. 047-1371-JJF FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., a Delaware corporation, and FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation Defendants. JURY TRIAL REQUESTED

FIRST AMENDED COMPLAINT FOR PATENT INFRINGEMENT Plaintiff Power Integrations, Inc. hereby alleges as follows:

THE PARTIES 1. Power Integrations, Inc. ("Power Integrations") is incorporated under the

laws of the state of Delaware, and has a regular and established place of business at 5245 Hellyer Avenue, San Jose, California, 95138. 2. Upon information and belief, defendant Fairchild Semiconductor

International, Inc. is incorporated under the laws of the state of Delaware, with its headquarters located at 82 Running Hill Road, South Portland, Maine, 04106. Upon information and belief, defendant Fairchild Semiconductor Corporation is incorporated under the laws of the state of Delaware, with its headquarters located at 82 Running Hill Road, South Portland, Maine, 04106. (Fairchild Semiconductor International, Inc. and Fairchild Semiconductor Corporation hereinafter collectively "Fairchild Semiconductor.")

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JURISIDICTION AND VENUE 3. This action arises under the patent laws of the United States, Title 35

U.S.C. § 1 et seq. This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). 4. Upon information and belief, this Court has personal jurisdiction over

defendants because defendants are incorporated, doing business and advertising in this judicial District. 5. Upon information and belief, venue is proper in this Court pursuant to 28

U.S.C. §§ 1391(b), (c) and 1400 because the defendants are subject to personal jurisdiction in this judicial District. GENERAL ALLEGATIONS 6. Power Integrations' products include its integrated pulse width modulation

("PWM") integrated circuits that are used in power supplies for electronic devices such as cellular telephones, LCD monitors and computers. These products are sold throughout the United States, including Delaware. 7. Upon information and belief, defendants manufacture PWM integrated

circuits devices (e.g., devices intended for use in power conversion applications such as LCD monitor power supplies or battery chargers for portable electronics), and directly and through their affiliates, uses, imports, sells, and offers to sell the same throughout the United States, including Delaware. FIRST CAUSE OF ACTION INFRINGEMENT OF U.S. PATENT NO. 6,107,851 8. forth herein. 9. Power Integrations is now, and has been since its issuance, the assignee The allegations of paragraphs 1-7 are incorporated as though fully set

and sole owner of all right, title, and interest in United States Patent No. 6,107,851, entitled "Offline Converter with Integrated Softstart and Frequency Jitter" ("the '851 2

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patent"), which was duly and legally issued on August 22, 2000. A true and correct copy of the '851 patent is attached hereto as Exhibit A. 10. Upon information and belief, defendants have been and are now

infringing, inducing infringement, and contributing to the infringement of the '851 patent by making, using, importing, selling, and offering to sell devices, including PWM integrated circuit devices, and/or inducing or contributing to the importation, use, offer for sale and sale by others of such devices covered by one or more claims of the '851 patent, all to the injury of Power Integrations. 11. Integrations. 12. Defendants' infringement has caused irreparable injury to Power Defendants' acts of infringement have injured and damaged Power

Integrations and will continue to cause irreparable injury until defendants are enjoined from further infringement by this Court. 13. Upon information and belief, Defendants' infringement has been, and

continues to be, willful so as to warrant enhancement of damages awarded as a result of its infringement. SECOND CAUSE OF ACTION INFRINGEMENT OF U.S. PATENT NO. 6,249,876 14. forth herein. 15. Power Integrations is now, and has been since its issuance, the assignee The allegations of paragraphs 1-7 are incorporated as though fully set

and sole owner of all right, title, and interest in United States Patent No. 6,249,876, entitled "Frequency Jittering Control for Varying the Switching Frequency of a Power Supply" ("the '876 patent"), which was duly and legally issued on June 19, 2001. A true and correct copy of the '876 patent is attached hereto as Exhibit B. 16. Upon information and belief, defendants have been and are now

infringing, inducing infringement, and contributing to the infringement of the '876 patent 3

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by making, using, importing, selling, and offering to sell devices, including PWM integrated circuit devices and/or inducing or contributing to the importation, use, offer for sale and sale by others of such devices covered by one or more claims of the '876 patent, all to the injury of Power Integrations. 17. Integrations. 18. Defendants' infringement has caused irreparable injury to Power Defendants' acts of infringement have injured and damaged Power

Integrations and will continue to cause irreparable injury until defendants are enjoined from further infringement by this Court. 19. Upon information and belief, Defendants' infringement has been, and

continues to be, willful so as to warrant enhancement of damages awarded as a result of its infringement.

THIRD CAUSE OF ACTION INFRINGEMENT OF U.S. PATENT NO. 6,229,366 20. forth herein. 21. Power Integrations is now, and has been since its issuance, the assignee The allegations of paragraphs 1-7 are incorporated as though fully set

and sole owner of all right, title, and interest in United States Patent No. 6,229,366, entitled "Off-Line Converter with Integrated Softstart and Frequency Jitter" ("the '366 patent"), which was duly and legally issued on May 8, 2001. A true and correct copy of the '366 patent is attached hereto as Exhibit C. 22. Upon information and belief, defendants have been and are now

infringing, inducing infringement, and contributing to the infringement of the '366 patent by making, using, importing, selling, and offering to sell devices, including PWM integrated circuit devices and/or inducing or contributing to the importation, use, offer for

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sale and sale by others of such devices covered by one or more claims of the '366 patent, all to the injury of Power Integrations. 23. Integrations. 24. Defendants' infringement has caused irreparable injury to Power Defendants' acts of infringement have injured and damaged Power

Integrations and will continue to cause irreparable injury until defendants are enjoined from further infringement by this Court. 25. Upon information and belief, Defendants' infringement has been, and

continues to be, willful so as to warrant enhancement of damages awarded as a result of its infringement. FOURTH CAUSE OF ACTION INFRINGEMENT OF U.S. PATENT NO. 4,811,075 26. forth herein. 27. Power Integrations is now, and has been since its issuance, the assignee The allegations of paragraphs 1-7 are incorporated as though fully set

and sole owner of all right, title, and interest in United States Patent No. 4,811,075, entitled "High Voltage MOS Transistors" ("the '075 patent"), which was duly and legally issued on March 7, 1989. A true and correct copy of the '075 patent is attached hereto as Exhibit D. 28. Upon information and belief, defendants have been and are now

infringing, inducing infringement, and contributing to the infringement of the '075 patent by making, using, importing, selling, and offering to sell devices, including PWM integrated circuit devices and/or inducing or contributing to the importation, use, offer for sale and sale by others of such devices covered by one or more claims of the '075 patent, all to the injury of Power Integrations. 29. Integrations. 5 Defendants' acts of infringement have injured and damaged Power

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30.

Defendants' infringement has caused irreparable injury to Power

Integrations and will continue to cause irreparable injury until defendants are enjoined from further infringement by this Court. 31. Upon information and belief, Defendants' infringement has been, and

continues to be, willful so as to warrant enhancement of damages awarded as a result of its infringement.

PRAYER FOR RELIEF WHEREFORE, Plaintiff requests the following relief:

(a) (b) (c) (d) (e)

judgment against defendants as to willful infringement of the '851 patent; judgment against defendants as to willful infringement of the '876 patent; judgment against defendants as to willful infringement of the '366 patent; judgment against defendants as to willful infringement of the '075 patent; a permanent injunction preventing defendants and their officers, directors,

agents, servants, employees, attorneys, licensees, successors, assigns, and customers, and those in active concert or participation with any of them, from making, using, importing, offering to sell or selling any devices that infringe any claim of the '851, '876, '366, or '075 patents; (f) judgment against defendants for money damages sustained as a result of

defendants' infringement of the '851, '876, '366, and '075 patents; (g) that any such money judgment be trebled as a result of the willful nature

of Defendants' infringement; (h) costs and reasonable attorneys' fees incurred in connection with this action

pursuant to 35 U.S.C § 285; and (i) such other and further relief as this Court finds just and proper.

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JURY DEMAND Plaintiff requests trial by jury.

Dated: June 30, 2005

FISH & RICHARDSON P.C.

By: /s/ John F. Horvath William J. Marsden, Jr. (#2247) Sean P. Hayes (#4413) John F. Horvath (#4557) 919 N. Market Street, Suite 1100 P.O. Box 1114 Wilmington, DE 19801 Telephone: (302) 652-5070 Facsimile: (302) 652-0607 Frank E. Scherkenbach 225 Franklin Street Boston, MA 02110-2804 Telephone: (617) 542-5070 Facsimile: (617) 542-8906 Michael Kane 60 South Sixth Street 3300 Dain Rauscher Plaza Minneapolis, MN 55402 Telephone: (612) 335-5070 Facsimile: (612) 288-9696 Howard G. Pollack Gina M. Steele Michael R. Headley 500 Arguello Street, Suite 500 Redwood City, CA 94063 Telephone: (650) 839-5070 Facsimile: (650) 839-5071 Attorneys for Plaintiff POWER INTEGRATIONS, INC.
50286109.doc

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Appendix 1 ­ Side-by-side comparison of the '719 and '075 patents. '719 Patent claim 8 '075 Patent claim 1

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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation, and INTERSIL CORPORATION, a Delaware corporation, Plaintiffs, v. POWER INTEGRATIONS, INC., a Delaware corporation, Defendants. C.A. No. 2:06-CV-151 (TJW)

ORDER GRANTING POWER INTEGRATIONS' MOTION TO DISMISS 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 GRANTED, and that all matters in this suit against Power Integrations, Inc. are dismissed with prejudice.