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[+] Author Notes

Kirk Teska is the author of Patent Project Management (ASME Press) and Patent Savvy for Managers (Nolo), is an adjunct law professor at Suffolk University Law School, and is the managing partner of Iandiorio Teska & Coleman, an intellectual property law firm in Waltham, Mass.

Mechanical Engineering 134(04), 40-41 (Apr 01, 2012) (2 pages) doi:10.1115/1.2012-APR-4

Abstract

This article discusses the significance of injunctions in patent infringement lawsuits. In earlier times, if a patent owner sued for patent infringement, the patent owner had a good chance of winning a preliminary injunction prohibiting sales of the allegedly infringing product pending the outcome of the trial. If the patent owner then won the trial, a permanent injunction was almost automatic. In 2001, it became much harder to win a preliminary injunction. All the accused infringer had to do was put up some kind of defense in order for the judge to deny the patent holder a preliminary injunction pending the outcome of the trial. The odds of obtaining a permanent injunction has been affected by several fairly recent cases as well. In 2006, the U.S. Supreme Court ruled that permanent injunctions, even when the patent holder wins, are no longer guaranteed. Some judges later ruled that the patent-infringing company, so long as it paid a license, could keep selling the infringing product. The judges even set the royalty rate.

Article

Apple, maker of products including the iPhone 4S (above), sued Samsung, which avoided an injunction by challenging the validity of one of Apple’s smartphone patents. At right is a version of a Samsung Galaxy S II phone.

Grahic Jump LocationApple, maker of products including the iPhone 4S (above), sued Samsung, which avoided an injunction by challenging the validity of one of Apple’s smartphone patents. At right is a version of a Samsung Galaxy S II phone.

Injunctions in patent infringement lawsuits matter. The threat of one can force a company accused of patent infringement to the settlement table since even a moderate risk that it will have to cease and desist selling a profitable product can be unbearable. Consider when Research in Motion lost its last appeal in the case where the Blackberry device was found to infringe several patents. RIM ended up paying $612.5 million to settle rather than face a permanent injunction. Once upon a time, if a patent owner sued for patent infringement, the patent owner had a good chance of winning a preliminary injunction prohibiting sales of the allegedly infringing product pending the outcome of the trial. If the patent owner then won the trial, a permanent injunction was almost automatic.

But, in 2001 it became much harder to win a preliminary injunction. All the accused infringer had to do now was put up some kind of defense in order for the judge to deny the patent holder a preliminary injunction pending the outcome of the trial. The case that started it all involved Amazon and Barnes & Noble over accusations that B&N infringed Amazon’s “One-Click” patent. An argument by B&N that the One-Click patent was invalid was enough to prevent the issuance of a preliminary injunction against B&N.

In a more recent example, Apple sued Samsung for patent infringement and sought a preliminary injunction prohibiting sales of Samsung’s Galaxy smartphone during the progression of the case (a trial is expected in July). Apple’s request for a preliminary injunction was denied even though Apple established it was likely to win at trial. The reason? Samsung raised substantial questions regarding the validity of one of the four Apple patents in the case.

The odds of obtaining a permanent injunction have been affected by several fairly recent cases as well. In 2006, the U.S. Supreme Court ruled that permanent injunctions, even when the patent holder wins, are no longer guaranteed. Some judges later ruled that the patent-infringing company, so long as it paid a license, could keep selling the infringing product. The judges even set the royalty rate.

That might be one reason some companies have turned to the International Trade Commission. There, if the patent owner wins the case, an injunction (technically called an “exclusion order”) is the only remedy. Apple, for example, sued Taiwan based HTC Corp. in the ITC alleging the Android phones violate Apple’s patents and won an exclusion order. But, ITC cases are limited to patent infringement suits against infringing imports and there are other hurdles as well to filing a suit in the ITC.

There is also some evidence that the current status quo (both preliminary and permanent injunctions being more difficult to obtain) might change.

If change comes, it will be for a curious reason. After the Supreme Court held that the permanent injunction standard for patent cases is the same as the permanent injunction standard for all cases, the old “special patent rule” (that permanent injunctions are automatic in patent cases when the patent owner wins) fell. This led some members of the Court of Appeals for the Federal Circuit to conclude that the Amazon case was wrongly decided since it basically established still another “special patent rule” regarding preliminary injunctions. If there is no special patent rule for permanent injunctions, then neither is there a special patent rule for preliminary injunctions.

A 2001 suit brought by Amazon, charging that Barnes & Noble infringed its One-Click patent, upset traditional assumptions about preliminary injunctions.

Grahic Jump LocationA 2001 suit brought by Amazon, charging that Barnes & Noble infringed its One-Click patent, upset traditional assumptions about preliminary injunctions.

That means the decision whether or not to grant a preliminary injunction in patent cases involves balancing several factors, including the likelihood that the patent holder will win.

The Amazon case, in contrast, held that a preliminary injunction is not available so long as there is some kind of a viable defense. That’s different from inquiring about the patent holder’s chances of winning in conjunction with the other “regular” preliminary injunction factors.

One way to look at it is the Supreme Court case that made permanent injunctions harder to get might result in making it easier to get preliminary injunctions.

Copyright © 2012 by ASME
Topics: Patents
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