Fairchild (Taiwan) Corp. v. Power Integrations, Inc. , 854 F.3d 1364 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
FAIRCHILD (TAIWAN) CORPORATION,
Appellant
v.
POWER INTEGRATIONS, INC.,
Appellee
______________________
2017-1002
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. 95/002,009.
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ON MOTION
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Before LOURIE, MOORE, and REYNA, Circuit Judges.
REYNA, Circuit Judge.
ORDER
Fairchild (Taiwan) Corporation moves the court to
remand this case to the Patent Trial and Appeal Board
with instructions to vacate certain aspects of its final
decision in the underlying inter partes reexamination and
issue a reexamination certificate. Power Integrations,
Inc. opposes the motion. We agree with Fairchild and
grant the motion.
2 FAIRCHILD (TAIWAN) CORP. v. POWER INTEGRATIONS, INC.
Fairchild is the owner of U.S. Patent No. 7,259,972(“the ’972 patent”). In 2008, Fairchild charged Power
Integrations with infringement of three patents, including
claims 6, 7, 18, and 19 of the ’972 patent. The jury’s
verdict rejected Power Integrations’s argument that the
’972 patent claims were invalid under 35 U.S.C. § 103 in
view of Majid and Balakrishnan and found that the
patent claims had been infringed. On appeal, this court
upheld the jury’s obviousness determination but reversed
its findings on infringement, and remanded for further
proceedings unrelated to the ’972 patent claims. Power
Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
843 F.3d 1315, 1340–42 (Fed. Cir. 2016).
In June 2012, Power Integrations requested inter
partes reexamination of claims 1, 2, 5–7, 11, 12, 15, 17–19,
22, 32, 34, and 52–66 of the ’972 patent. The examiner
rejected all of the claims in the reexamination, including
claims 6, 7, 18, and 19, finding those claims unpatentable
under § 103(a) in view of TEA1401T and Balakrishnan.
In December 2015, the Board issued a decision affirming
the examiner’s rejection of the claims. After the Board
denied Fairchild’s request for rehearing, Fairchild ap-
pealed to this court in October 2016. Fairchild brought
this motion to vacate and remand following the issuance
of this court’s mandate in Power Integrations.
Under the version of 35 U.S.C. § 317(b) (2006) that
governs this case, no inter partes reexamination proceed-
ing can be brought or “maintained” on “issues” that a
party “raised or could have raised” in a civil action arising
in whole or in part under 28 U.S.C. § 1338 once “a final
decision has been entered” in the civil action that “the
party has not sustained its burden of proving the invalidi-
ty” of the patent claim. Put simply, “[i]f a defendant
brought an invalidity challenge in a district court litiga-
tion and was unsuccessful, it is not permitted to bring the
same challenge in an inter partes reexamination.” Func-
tion Media, L.L.C. v. Kappos, 508 F. App’x 953, 955–56
FAIRCHILD (TAIWAN) CORP. v. POWER INTEGRATIONS, INC. 3
(Fed. Cir. 2013) (holding that there was no basis for
continuing an appeal in light of § 317(b)).
We have held that this restriction applies when “all
appeals have terminated.” Bettcher Indus., Inc. v. Bunzl
USA, Inc., 661 F.3d 629, 646 (Fed. Cir. 2011). That is
precisely the situation here. The district court entered
judgment against Power Integrations, holding that it
failed to prove claims 6, 7, 18, and 19 were obvious over
Majid and Balakrishnan. This court affirmed the holding,
and the time to petition for a writ of certiorari has passed.
Moreover, Power Integrations does not dispute that these
obviousness grounds could have been raised in the civil
action in which it failed to meet its burden.
While it is true that in Power Integrations this court
vacated and remanded for additional proceedings, we
cannot agree with Power Integrations that this renders
the decision not “final” for § 317(b) purposes. Critically,
those proceedings are unrelated to the ’972 patent. By its
terms, § 317(b) is concerned with a final decision “that the
party has not sustained its burden of proving the invalidi-
ty of any patent claim.” And here, Power Integrations
does not suggest, nor is there any reason to believe, that
any unresolved issue on remand would have any effect on
the now-final ’972 patent validity determinations.
Nor are we persuaded by Power Integrations’s argu-
ment concerning the remaining claims that Fairchild
appealed. Fairchild has asked the court to consider its
appeal concerning the remaining claims abandoned and to
remand only those claims at issue in Power Integrations.
Power Integrations fails to offer any persuasive reason
why such request should not be granted. While Fairchild
is abandoning independent claims 1 and 15, that has no
bearing on the application of § 317(b) here.
On remand, the Board is ordered to dismiss the reex-
amination of claims 6, 7, 18, and 19 of the ’972 patent.
Fairchild has abandoned its appeal of the decision affirm-
4 FAIRCHILD (TAIWAN) CORP. v. POWER INTEGRATIONS, INC.
ing the rejection of claims 1, 2, 5, 11, 12, 15, 17, 22, 32, 34,
and 52–66, and therefore the Board is further ordered to
enter a reexamination certificate invalidating those
claims.
Accordingly,
IT IS ORDERED THAT:
(1) The motion is granted. The case is remanded for
further proceedings consistent with this order.
(2) Each side shall bear its own costs.
(3) Pursuant to Federal Circuit Rule 41, this order
shall constitute the mandate.
FOR THE COURT
April 21, 2017 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court