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By Courtland Merrill
A fundamental benefit of patent ownership is the right to exclude others from making, using, or offering for sale the claimed invention. Fail to secure a preliminary injunction and a patent owner’s business may be so irreparably harmed by competition that even a favorable judgment after a trial on the merits will not make the patent owner whole. While injunctive relief is fundamental to patent ownership, court decisions have not made exercising this right easy.
First, in 2006, the U.S. Supreme rejected a general rule presuming irreparable harm once a patent has been adjudged infringed and not invalid. See eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393-94 (2006). Post-eBay, a patent owner must establish the same four factors required in all federal cases to obtain a preliminary injunction: (1) that it is likely to succeed on the merits; (2) that it is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in its favor; and (4) that an injunction is in the public interest. In practice, the eBay decision has limited injunctive relief to cases between competitors and where the patent owner has shown irreparable economic consequences, e.g., lost customers, market share, and good will, even though the Patent Act does not so narrowly limit injunctive relief. See Robert Bosch, LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1155 (Fed. Cir. 2011).
Second, in order to establish the required likelihood of success on the merits, Federal Circuit case law holds that a preliminary injunction should not issue if the opponent raises a “substantial question” about the asserted patent’s validity—even if that substantial question would not suffice to carry the opponent’s burden at trial. See Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 1343, 1350 (Fed Cir. 2001). Other circuit courts, addressing non-patents cases, have concluded that a party seeking preliminary injunctive relief can show a likelihood of success by proving merely a “fair chance of prevailing,” which may be less than a preponderance of the evidence. See Planned Parenthood Minn., N.D., S.D. v. Rounds, 530 F.3d 724, 732 (8th Cir. 2008); PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137, 1143 (8th Cir. 2007); Citigroup Global Mkts., Inc. v. VCG Special Opportunities Master Fund, Ltd., 598 F.3d 30, 35 (2d Cir. 2010). Several judges of the Federal Circuit have commented that the substantial question standard is inconsistent with Supreme Court precedent. Kimberly-Clarke v. First Quality Baby Products, 660 F.3d 1293, 1295 (Fed. Cir. 2011).
Third, even when a patent owner has persuaded a district court to grant a preliminary injunction, a patent owner faces obstacles on appeal. A patent owner can prevail in a district court only to have its preliminary injunction vacated due to an erroneous claim construction subjected to a less deferential de novo review on appeal. See, e.g., The Chamberlain Group, Inc. v. Techtronic Indus. Co. Ltd., — Fed. Appx. —-, 2017 WL 360561 at *6 (Fed. Circ. 2017) (vacating preliminary injunction where incorrect claim construction was sole basis for conclusion of success on the merits).
Despite these obstacles, two recent Federal Circuit decisions show that preliminary injunctive relief remains available. In February, the Federal Circuit affirmed a district court’s grant of a preliminary injunction to Metalcraft of Mayville, Inc., d/b/a Scag Power Equipment. See Metalcraft of Mayville, Inc. v. The Toro Co., 848 F.3d 1358 (Fed. Cir. 2017). The injunction prohibits Minnesota manufacturer Toro from offering to sell lawnmowers with a platform suspension systems that infringes Scag’s patent. The appellate court affirmed the district court’s claim construction and rejected Toro’s non-infringement and invalidity defenses. Id. at 1364-68. In upholding the district court’s finding of irreparable harm, the Federal Circuit rejected Toro’s argument that the presence of “twelve other companies” in the market that also infringe negated the irreparable harm created by Toro’s infringement. Id. at 1368.
In January, the Federal Circuit affirmed a district court’s grant of preliminary injunctive relief to Tinnus Enterprises, LLC, a manufacturer of a toy for filling water balloons. Tinnus Enterprises, LLC v. Telebrands Corp., 846 F.3d 1190, 1208 (Fed. Cir. 2017). The Federal Circuit affirmed despite Patent Trial and Appeal Board proceedings operating in parallel in which the patent claims at issue had been found more likely than not invalid. Both the Tinnus and Toro cases provide examples where preliminary injunctive relief is granted—and affirmed on appeal—when likelihood of success on the merits and irreparable harm are proven by the patent owner and the district court correctly construes the claims at issue.
Courtland Merrill is a trial attorney at Anthony Ostlund Baer & Louwagie P.A. His practice focuses exclusively on business litigation across multiple industries on behalf of both plaintiffs and defendants. He has considerable experience enforcing intellectual property rights, including patents, in federal courts across the country. He can be reached at email@example.com, or (612) 492-8210.