Jul 23

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Novel argument still does not extend jurisdiction of U.S. patent damages

In re: Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc. et al. No. 11-1218, -1238 (Fed. Cir. Mar. 26, 2013), the Court addressed the issue of the interplay of general damages theory with patent damages. In general, damages are calculated in a manner that allows the plaintiff to be put back to an economic position that would have occurred absent the wrongful conduct. In this case, infringement of a U.S. patent was connected to non-U.S. activities. The plaintiffs argued that to be fully compensated, all sales, including international sales where the U.S. patent has no jurisdiction, need to be considered.

Not surprisingly, the Federal Circuit rejected this novel argument. The Federal Circuit wrote:

“According to Power Integrations, this principle of “full compensation” has no inherent, per se geographical limits. Power Integrations cites this court’s decision in Rite-Hite, where we explained that “[i]f a particular injury was or should have been reasonably foreseeable by an infringing competitor in the relevant market, broadly defined, that injury is generally compensable absent a persuasive reason to the contrary,” 56 F.3d at 1546, and urges us here to incorporate Fairchild’s foreign sales as part of “the relevant market.”…

Power Integrations’ “foreseeability” theory of worldwide damages sets the presumption against extraterritoriality in interesting juxtaposition with the principle of full compensation. Nevertheless, Power Integrations’ argument is not novel, and in the end, it is not persuasive. Regardless of how the argument is framed under the facts of this case, the underlying question here remains whether Power Integrations is entitled to compensatory damages for injury caused by infringing activity that occurred outside the territory of the United States. The answer is no.”


About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2013/07/novel-argument-still-does-not-extend-jurisdiction-of-u-s-patent-damages/

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