Power Integrations wins $175m patent infringement case

Business news |
By Nick Flaherty

Power Integrations has won a key patent infringement case against ON Semiconductor, which took over Fairchild Semiconductor in 2016. The $175m cash settlement in the US means the companies have agreed to end all litigation between the parties. Unlike other deals, neither company granted any licenses to the other.

The Power Integrations patents cover technology for high-voltage power conversion in chips that are used in chargers for mobile phones and computers

“The settlement of our litigation with ON Semiconductor is a landmark win for our company, demonstrating the durability and the value of our intellectual property, as well as our determination to protect it from unlawful use by competitors,” said Balu Balakrishnan, president and CEO of Power Integrations.

In context, the company saw net sales of $114m in the third quarter, up 11 percent from the prior quarter and up four percent from the third quarter of 2018. Net income was $17.1m, so the $175m win was significant.

“We returned to year-over-year revenue growth in the third quarter driven by strength in our communications category, reflecting accelerated adoption of fast chargers for smartphones. Our InnoSwitch ICs, including our new higher-power devices with GaN switches, are winning in the market thanks to their industry-leading combination of efficiency and integration. Looking ahead, while trade issues and weaker macroeconomic conditions continue to weigh on demand, we expect strong year-over-year growth in the fourth quarter.”

The win is the latest in several similar court cases this year.

“We have prevailed at every significant turn throughout these litigations, and we are thrilled that we could help Power Integrations achieve this important victory. They are the true innovators in this market, and we have worked diligently to protect their valuable intellectual property,” said Frank Scherkenbach, principal of law firm Fish & Richardson who led Power Integrations’ litigation since the beginning.

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“We hope that the history of these cases and this large settlement will serve as a deterrent against infringement by other competitors,” he said. In the last year, Power Integrations won two other patent infringement cases in the District of Delaware against Fairchild (now ON) with damages of nearly $25 million.

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