Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. Here's what I'm looking at today:

• Fish & Richardson's 15-year journey to a $175 million patent infringement settlement.

• Federal Circuit has constitutional concerns about PTAB APJ appointments.

• Pillsbury opens its PTAB Handbook to all.

As always, you can email me your feedback and follow me on Twitter.

Fish & Richardson partner Frank Scherkenbach.

The Long, Long Road to a $175 Million Settlement

Fifteen years ago, San Jose electronics company Power Integrations sued Fairchild Semiconductor, alleging infringement of technology used in chargers for mobile devices.

Numerous district court trials, PTAB and ITC actions, and Federal Circuit appeals later, PI and Fairchild successor ON Semiconductor finally put down their swords earlier this month. ON will pay PI $175 million to settle all of the litigation, at least for the next several years.

"It's a little like sending your newborn off to college. It's almost been that long," said Fish & Richardson partner Frank Scherkenbach, who has litigated the cases for PI "arm-in-arm" with Fish partners Michael Headley and Howard Pollack from day one.

Across the table has been a long line of some of the world's top law firms: Orrick, Finnegan Henderson, McDermott, MoFo, Paul Hastings, Baker Botts and, most recently on the appeals, Quinn Emanuel Urquhart & Sullivan.

Initially, Power Integrations and Fish made some law they didn't want: The Federal Circuit ruled in 2013 that lost profits for overseas sales weren't recoverable, dropping PI's $34 million jury award in Delaware federal court to about $6 million. Then last year U.S. District Judge Leonard Stark ruled that the Supreme Court had implicitly overruled the Federal Circuit with its WesternGeco decision, and put worldwide damages back on the table.

"It was pending so long, we were right, then we were wrong, then we were right again," Scherkenbach quips.

The Federal Circuit had been scheduled to hear ON's appeal next month, one of several factors Scherkenbach said might have helped spur the settlement.

Another big factor, in his view, were two district court cases pending before U.S. District Judge Maxine Chesney in San Francisco. PI won verdicts of $105 million and $140 million in the first case, only to have the Federal Circuit order retrials each time as it refined the law of damages. Scherkenbach said he was confident the third trial was still going to yield a big number, perhaps $90 million. With liability already affirmed on appeal, "there really was no escape for them," he said. A separate, yet-to-be-tried case before Chesney had the potential for an even bigger award, Scherkenbach said.

It did look for awhile as if ON had one escape route. After announcing its planned acquisition of Fairchild in 2015, but before the deal closed, ON filed petitions for IPRs challenging PI patents, ultimately invalidating quite a few claims, including some that supported the San Francisco jury awards. This time PI came away with the win at the Federal Circuit: The appellate court ruled in June of this year that ON was in privity with Fairchild, and therefore was years too late in bringing the IPRs. "That caused pretty much their entire IPR strategy to crumble," Scherkenbach said.

According to a Power Integrations SEC filing, the settlement calls for each side to release the other from current patent infringement actions, and not to file any additional actions until at least 2023. Neither party granted the other a license, which Scherkenbach acknowledged is unusual in patent settlements.

It reflects that PI lives and dies by innovation, he said. "They don't license their IP—never have, never will—because it's the lifeblood of their company."

After 15 years, he'd certainly be in a position to know.

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Ropes & Gray's Scott McKeown

The PTAB Has an Appointments Problem

When the Supreme Court ruled last year that the SEC's administrative law judges were unconstitutionally appointed, a lot of people began making the argument that the same logic should apply to the PTAB's 270 APJs.

I was skeptical (as were others), but what matters now is that the Federal Circuit is taking the argument very, very seriously. As Scott McKeown points out on Ropes & Gray's Patents Post-Grant blog, a three-judge panel signaled strongly during arguments earlier this month that it may have to remove PTAB judges' civil service protections in order to keep the board viable under the Supreme Court's Lucia decision.

As Judge Kimberly Moore put it during argument in Arthrex v. Smith & Nephew, the court might have to cut "a tiny little unconstitutional part" of the PTO personnel statute "to make the rest constitutional." The court ordered further briefing on the issue last week, underscoring its seriousness.

If the court were to rule as it's signaling, it will be another disruption for a board and practitioners that just endured major changes last year following the Supreme Court's SAS Institute v. Iancu. All final written decisions from the PTAB that are now pending appeal would likely get sent back for a re-do before a different panel of PTAB judges, McKeown says.

He doesn't think the new panels would have to reopen the record or hold new hearings. But they would have to take a fresh look at the evidence and render an independent judgment. Anything less, and "you can imagine the hue and cry that they're just rubber-stamping everything."

That would further strain a board that's already in an ongoing race to meet the AIA's statutory deadlines for producing opinions.

So what kind of impact would the loss of civil service protections have on the PTAB, especially if it were being done for the explicit purpose of giving the PTO director more control over board decision making?

"I can't imagine it would be great for retaining people and keeping them happy," McKeown said. "I'm sure if I were a judge, I'd like the independence to do what I think is right" under the law. (Disclosure: McKeown's spouse is a board member.)

I think the Federal Circuit gets that too. But it sounds as if the judges think that removing the protections might be the least disruptive way to keep the PTAB in the Supreme Court's good graces. As Moore put it at the Oct. 1 argument, "If the thing's unconstitutional, they don't actually have those protections anyway, because they were not rightfully appointed."

McKeown and Ropes' Doug Hallward-Driemeier and Matt Rizzolo will be conducting a webinar on the topic Nov. 4. The Federal Circuit is scheduled to hear a second case that day that raises the same issue, which might shed more light on the court's intentions.

Pillsbury's PTAB Handbook, Now Near You

Speaking of the PTAB, the Fifth Edition of Pillsbury Winthrop Shaw Pittman's PTAB Handbook is now available—for everyone. Edited by Pillsbury partner Bill Atkins, the Handbook breaks down each step of a PTAB proceeding with examples from all relevant PTAB caselaw.

Previous editions were published by Bloomberg BNA, but Pillsbury has decided to publish the latest version on a dedicated website, free for anyone to peruse. "We've got a team of people looking at every decision that issues," Atkins said. "We're doing our best to keep pace with the PTAB."

That's all from Skilled in the Art this week. I'll see you all again on Tuesday.