Texas Advanced Optoelectronic Solutions, Inc. v. Intersil Corporation et al.


Docket No. 2017-2388

DYK, O’MALLEY, HUGHES
July 6, 2018

Brief summary: DC decision regarding trade secret misappropriation and damages, and patent infringement, affirmed-in-part, reversed-in-part, and remanded.

Summary: This opinion is a modified opinion of that originally-issued on May 1, 2018. In the May opinion, the DC decision that Intersil did “not point to any evidence or argument at trial-that the patent discloses the” trade secret and affirmed that Intersil was liable for trade secret misappropriation. But the FC panel found the damages award to be improper because it was not clear, e.g., “which of the trade secrets contributed to what amount of profit to be disgorged” and remanded for a new trial on disgorgement. The FC panel also agreed that Intersil did not infringe TAOS’s method claims but infringed the apparatus claims. And the FC panel affirmed the DC’s exclusion of excluding sales outside the US from the § 271(a) damages calculation (e.g., Transocean, FC 2010 (“must be an offer to make a sale that will occur in the [US]; it is not enough that the offer is made in the [US]”)). TAOS had alleged misappropriation of three trade secrets: a “packaging roadmap” allegedly used in Intersil’s decision to use plastic packaging; the “interleaved photodiode array structure, allegedly used by Intersil” to modify its products; and financial information used in Intersil’s “Build vs. Buy” decision. Here, the FC panel concluded that misappropriation of the packaging roadmap was not misappropriated since, e.g., Intersil used “low-cost plastic…long before TAOS revealed” its information. The FC panel also disagreed that the array structure “was no longer ‘secret’ in 2004” (e.g., “Intersil does not argue…that the patent discloses the combination of” features), and thus no error with the DC’s determination that Intersil misappropriated this trade secret. And although the FC panel agreed with Intersil that the financial information was not misappropriated as “the Confidentiality Agreement clearly permitted that use”, it affirmed the verdict of Intersil’s liability for trade secret misappropriation based on its “packaging roadmap” determination. Because only one of the three misappropriation theories was affirmed, the disgorgement award was vacated (e.g., TAOS’s expert “did not explain which of the trade secrets contributed to what amount of profit”, DC must determine “the time at which the” array structure “trade secret became properly accessible to Intersil and the duration of any head-start period”). The FC panel also concluded that “TAOS does not have” “a Seventh Amendment right to a jury decision on its request for disgorgement of Intersil’s profits” (“From all we have seen, no disgorgement remedy was available at law in 1791 for” trade secret misappropriation.) On the DC’s finding of no infringement of TAOS’s method claims, TAOS argued that Intersil’s product infringed those claims when operated in “Mode 3” but the FC panel found “[t]here was no evidence presented at trial that any of Intersil’s products in fact operate in Mode 3.” The FC panel also agreed with Intersil that there was no evidence of direct infringement of the method claims (Mirror Worlds, FC 2012). But the FC panel affirmed the judgment of TAOS’s apparatus claims (e.g., “those claims only require” that Intersil’s products “are capable” of making the required determination). The FC panel agreed with Intersil that the patent infringement award was duplicative of the trade secret misappropriation award (Aero Prods., FC 2006 (no “double recovery”)), and therefore vacated it. Regarding the § 271(a) damages calculation, no error was found as “TAOS failed to present any evidence establishing the required domestic activity.” The FC panel vacated the DC’s denial of TAOS’s request for an injunction because the DC did not provide “a full discussion of irreparable harm and inadequacy of compensation at law.” Because the FC panel affirmed infringement of the apparatus claims, the DC’s denial of TAOS’s motion for enhanced damages based on the jury’s finding of willful infringement was vacated.

This entry was posted in Damages, Infringement, Injunction, Trade Secret. Bookmark the permalink.

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