Free Redacted Document - District Court of Delaware - Delaware

Case 1:04-cv-01371-JJF

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Exhibit A

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE POWER INTEGRATIONS, INC., a Delaware corporation, Plaintiff, vs. FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC., a Delaware corporation, and FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware corporation, Defendants. No. C.A. 04-1371

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VIDEOTAPED DEPOSITION OF SHAWN SLAYTON San Francisco, California Friday, March 31, 2006

Reported by: SUZANNE F. BOSCHETTI CSR No. 5111 Job No. 3-45930

SARNOFF COURT REPORTERS AND LEGAL TECHNOLOGIES 877.955.3855
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Q Okay. A But we should assume that yeah, maybe it's Infineon. Maybe it's ON Semiconductor. Maybe it's STMicroelectronics. You know, the list goes on. Q Okay. Now, in this report you said you expect Power Integrations to regain share at Samsun when/if the company prevails at Fairchild -- in the Fairchild lawsuit. Does that assume that Power Integrations will get all of the sales that Fairchild currently has if it prevails? A Yes. Q Okay. And what is that -- what is that based upon? A Well, it's based upon the fact that when electronics manufacturers have second -- have a second source, if one of those sources goes away, certainly in the near term they're -- they're not going to qualify -or they're not going to identify someone to come in and be a second source. The guy who is already there selling parts to them is going to take all the business. That's the assumption. Q Okay. But now you just said that we had to assume that there was third party suppliers. A Small, smaller guys. I would imagine that's the case.

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Q -- six months? A For me the near term is less than a year. Q Okay. So when you're writing this, when you mean that Power Integrations may regain share at Samsun, you're meaning that they may regain share in the near term? MS. PITTMAN: Objection to the extent it assumes facts not in evidence. Go ahead. THE WITNESS: I'm not qualifying that. BY MR. VANDERZANDEN: Q Okay. A Because I don't think I did qualify it in here. I would never qualify that because it's impossible to say if the business is going to ramp and if it's going to go away again. It just doesn't -Q Okay. A Yeah. Q Okay. So was it your opinion, then, if Power Integrations was successful in its lawsuit against Fairchild, they would have the ability to prevent Fairchild from selling its products to Samsun? A No. It was my opinion that Samsun would no longer wish to purchase parts from Fairchild where it was well understood that those parts infringed on

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11:12:54 Q So couldn't we also assume that that third 11:12:56 party supplier could help fill that portion of the -A They may ask that guy to ramp. They may not. 11:13:00 But in the near term you're going to go to the guy who's 11:13:02 11:13:02 been shipping you the most parts, who is the most reliable vendor who you've dealt with for a very long 11:13:02 11:13:06 time. That's been my experience. 11:13:10 Q What do you mean by near term? 11:13:14 A Meaning in the first -- in -- you know, it 11:13:16 could take -- to qualify somebody else or to ask 11:13:18 somebody to ramp, here's another question or here's 11:13:24 another feature then. What if there was, you know, third -- a third and a fourth vendor but they've always 11:13:24 only supplied five percent. You can't call that guy and 11:13:28 say remember I used to take 5,000 parts a month from 11:13:30 you, now I need to take 500,000 parts a month from you. 11:13:32 11:13:38 That guy won't be able to deliver. Clearly he won't. 11:13:42 It will take him three, six months before he can work 11:13:48 that into his supply chain. So in the near term it's going to be the guy who can sell you the most parts as 11:13:52 11:13:58 quickly as you need them. 11:14:02 Q Okay. What -- I'm talking about a time frame here. What do you mean by near term? Are you talking 11:14:06 11:14:08 about -11:14:10 A Near term -1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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another U.S. company. Q Okay. So it was your opinion that Samsun would no longer want to purchase parts from Fairchild? A That's correct. Q Okay. A That Samsun is not in the habit of purchasing components from vendors where it's been well understood that these parts infringe on another company's intellectual property. Q Okay. Is that your understanding even for products that Samsun is not shipping into the United States? A I don't know that for sure. Q You don't know what for sure? A I don't know -- I have not verified Samsun's policy regarding purchasing parts that infringe on U.S. -- Samsun's policy for purchasing parts that infringe. If those electronics are destined for places outside the United States, I have not verified their policy. Common sense says that Samsun, a multinational firm, is not going to buy a part and put it into a certain device and then have to mark that device with a skew that this device can only go outside the United States because it has an infringing part, and these electronics can go to the U.S. because they don't have

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SARNOFF COURT REPORTERS AND LEGAL TECHNOLOGIES 877.955.3855
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any infringing parts. That would be very inefficient. 11:16:08 1 11:16:12 2 Okay. You would just get rid of the infringing part. Q So you're assuming that Samsun would just get 11:16:16 3 11:16:18 4 rid of the infringing part -11:16:18 5 A I am. 11:16:20 6 Q -- if Power Integrations is successful in its 11:16:22 7 lawsuit against Fairchild? 11:16:24 8 A For POWI or anyone else. 11:16:48 9 Q Okay. A I don't believe Samsun will knowingly purchase 11:17:02 10 11:17:10 11 its parts that infringe United States intellectual 11:17:12 12 property. Q Have you ever talked to anyone at Samsun about 11:17:18 13 11:17:22 14 that? 11:17:22 15 A No. Q Has anyone at Power Integrations told you that 11:17:26 16 11:17:28 17 Samsun would quit buying Fairchild parts? 11:17:32 18 A No. 11:17:36 19 Q Are you aware of what percentage of -- of 11:17:40 20 products Samsun ships to the United States? 11:17:40 21 A Repeat the question. Q Are you aware of what percentage of products 11:17:42 22 that contain these power ICs that Samsun manufactured 11:17:44 23 11:17:48 24 and sells go into the United States? 11:17:52 25 A No, not exactly. I don't know that.

that came into the United States were as low as ten percent, would that have changed the content of this report? A No. Q Okay. A Again, I'm agnostic to the notion of where the parts get shipped. Q Sure. Okay. I'm going to take you to page 9 of this report. You have a statement in there saying that POWI was awarded monetary damages against its -let me start with this sentence here. It says: ..."prior litigation that POWI initiated against ON Semiconductor (then MOT) in 1999 wherein POWI was awarded monetary damages of $32 million. The 1999 outcome was also a meaningful boon to POWI's competitive positioning in the industry." Where did you get that number of $32 million? A A press release. The Power Integrations press release. Q Okay. Was it -- when you wrote this report, was it your understanding that Power Integrations collected $32 million from that litigation? A It was something -- some order of magnitude. Something near there. I don't know what the exact

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11:17:52 Q So as far as you know, it could be as low as, 11:17:54 say, 25 percent? 11:18:00 A 25 percent of -11:18:04 Q Of all the products that they're selling that have these power ICs in them go into the United States? 11:18:06 A We would have to find out how many cell phones 11:18:06 Samsun ships into the United States of that hundred or 11:18:08 11:18:10 so million a year that they're producing. 11:18:20 Q Right. 11:18:22 A I don't know that number off the top of my 11:18:24 head. I bet it's a third or more. Q Okay. Did you -- did you find that number out 11:18:26 11:18:30 when you wrote this report? 11:18:32 A No. 11:18:36 Q Okay. So you didn't do any independent 11:18:40 research other than guessing that it was a third or 11:18:42 more? A Why would that have been important to me? It 11:18:50 11:18:50 was not -- I didn't do that research because it's not 11:18:56 important to me. 11:19:02 Q Okay. So -11:19:04 A Because I don't write research on Fairchild. 11:19:08 Q Sure. 11:19:10 A Uh-huh. 11:19:12 Q If Samsun -- if the percentage of its products 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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number was. Q Okay. Now, the next sentence you write was: "The 1999 outcome was also a meaningful boon to POWI's competitive positioning in the industry." What does that mean? A That means that electronics manufacturers were now less inclined to buy Motorola parts, now ON Semiconductor, because the understanding that those parts infringed on Power Integrations' parts. And that's common practice. Q Okay. Is that -- is that true to this day? A Yeah, ON Semiconductor is not a very meaningful player in this business, to my knowledge, so I think that that -- that persists to this day. Q Okay. Do you know whether Power Integrations has any licensing contracts with ON Semiconductor? A No. Q Okay. Do you know whether ON Semiconductor is prevented from manufacturing certain parts? A No. Q So where did you get the information that the outcome was a meaningful boon to POWI's competitive positioning? A Again, that's common sense. ON Semiconductor

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SARNOFF COURT REPORTERS AND LEGAL TECHNOLOGIES 877.955.3855
bcbc87af-1179-4f6c-9643-3489beef61be

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Exhibit B

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CONFIDENTIAL DOCUMENT

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Exhibit C

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CONFIDENTIAL DOCUMENT

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Exhibit D

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Exhibit F

Case 1:04-cv-01371-JJF
Jennifer Pierce
From: Sent: To: Cc: Subject:

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Michael Headley Wednesday, June 07, 2006 10:48 PM Brian Vanderzanden ([email protected]) Vickie L. Feeman ([email protected]) Re: PI-Fairchild: U.S. manufacturing discovery

Brian, I received your fax last night with Fairchild's Third Supplemental Response to Interrogatory No. 8, but this cannot be the entire universe of information regarding the design/process change that resulted in Fairchild's manufacturing of nearly 3,000,000 units of the accused FSD210 devices in the United States during this litigation. At the very least, Power Integrations will need documents and a 30(b)(6) deposition on the concerning the design/process change, manufacture, and subsequent distribution/sale of the devices. Please inquire as to your witnesses' availability for deposition on these issues so that we can get the deposition(s) on calendar in time to wrap up this discovery before the summer gets away from us, and please also confirm that Fairchild will produce all documents and things concerning the design/process change, including information about what happened to the parts manufactured in the United States, by next Friday, June 16, to allow Power Integrations time to review the documents and prepare for deposition. Power Integrations will continue to evaluate the issues surrounding the U.S. manufacture of the FSD210 products in light of Fairchild's disclosures and will provide a more complete picture of the necessary discovery as Fairchild comes forth with information to permit a full inquiry into this entire sequence of events. Sincerely, Michael R. Headley Fish & Richardson P.C. 500 Arguello St., Suite 500 Redwood City, CA 94063-1526 (650) 839-5139 (direct) (650) 839-5071 (fax) This e-mail may contain confidential and privileged information. If you received it in error, please contact the sender and delete all copies.



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Exhibit G

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Exhibit I

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CONFIDENTIAL DOCUMENT

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Exhibit J

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CONFIDENTIAL DOCUMENT