Preliminary Injunctions in Patent Cases

FRCP 65(a)- There is a rule, but is there a way?

Preliminary Injunction

1. Likelihood of success on the merits2. Irreparable Harm3. Balance of Hardships*4. Public Interest*

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (U.S. 2006)

No Presumption of Irreparable Harm

• eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (U.S. 2006) (rejecting broad classifications and categorical rules for injunctions) – “[T]he decision whether to grant or deny injunctive relief rests within

the equitable discretion of the district courts . . . in patent disputes no less than in other cases governed by such standards.”

– Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008): Expressly extending eBay’s rearticulation of the injunction factors to preliminary injunctions

• Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1148 (Fed. Cir. 2011)– “We take this opportunity to put the question to rest and confirm that

eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.”

Presumption?

• Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 1344 (Fed. Cir. 2013)– “Exclusivity is closely related to the fundamental nature of patents as

property rights. It is an intangible asset that is part of a company's reputation, and here, Douglas's exclusive right to make, use, and sell the patented inventions is under attack by Buyers's infringement. .”

– “Where two companies are in competition against one another, the patentee suffers the harm--often irreparable--of being forced to compete against products that incorporate and infringe its own patented inventions.”

Likelihood of Success on the Merits

Likelihood of Success on the Merits Requires Only One Claim of the Asserted Patent[s]

• To establish a likelihood of infringement, [Plaintiff] must make a clear showing that each and every limitation of at least one claim of the Asserted Patents is infringed by [Defendant].– Abbott Laboratories v. Andrx Pharmaceuticals, Inc.,

473 F.3d 1196, 1201 (Fed. Cir. 2007).

• Strategic Considerations– Dependent claims– Validity concerns

Presumption of Validity

• A patent is presumed valid and enjoys the same presumption of validity during preliminary injunction proceedings as at other stages of litigation.– Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372,

1377 (Fed. Cir. 2009).

• To defeat a preliminary injunction based on invalidity, [Defendant] must show that it is “more likely than not that [it] will be able to prove at trial, by clear and convincing evidence, that the patent is invalid.”– Id. at 1379.

Validity Challenges

• 101: subject matter eligibility– Myriad, Prometheus, Alice

• 102: Anticipation• 103: Obviousness• 112:– (1) Written Description, Enablement– (2) Indefiniteness (Clarity)

The Obviousness Inquiry Looks at the Invention As A Whole

• 35 U.S.C. 103(a) (pre-AIA)– A patent for a claimed invention may not be obtained. . .if the

differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . .

• “[A] patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art. . .This is so because inventions in most, if not all, instances rely upon building blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known.  – KSR Int’l Co. v. Teleflex Inc., 127 S. Ct. 1727, 1741 (2007)

Merely Throwing Multiple References At The Asserted Patents Is Not Enough

• In addition, there must be “an apparent reason to combine the known elements in the fashion claimed by the patent at issue.” 

– KSR, 127 S. Ct. at 1741.

• "Although the incentive to combine may be inferred from the nature of the problem, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.” Won-Door Corp. v. Cornell Iron Works, Inc., 2013 U.S. Dist. LEXIS 143488 (D. Utah Oct. 3, 2013), *2 (citing K-Tec, Inc. v. Vita-Mix Corp., 729 F. Supp. 2d 1312, 1325 (D. Utah 2010).

103 Challenges After KSR

• “Mere recitation of the words ‘common sense’ without any support adds nothing to the obviousness inquiry.” – Plantronics, Inc. v. Aliph, Inc., 2013 U.S. App. Lexis 15615

(Fed. Cir. July 31, 2013)

• Objective indicia “can be the most probative evidence of nonobviousness in the record, and enables the court to avert the trap of hindsight.”– Leo Pharm. Prods., Ltd. v. Rea, 2013 U.S. App. LEXIS 16610, *

30-31 (Fed. Cir. Aug. 12, 2013)

Irreparable Harm

Demonstrating Irreparable Harm

1. Direct (esp. two-party) competition2. Loss in market share and market opportunities3. Price erosion4. Patented product at core of plaintiff’s business5. Damage to reputation or goodwill6. Defendant’s inability to satisfy judgment*

References:Robert Bosch, 659 F.3d at 1151

• Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 1344 (Fed. Cir. 2013)– “Exclusivity is closely related to the fundamental nature of patents as

property rights. It is an intangible asset that is part of a company's reputation, and here, Douglas's exclusive right to make, use, and sell the patented inventions is under attack by Buyers's infringement. .”

– “Where two companies are in competition against one another, the patentee suffers the harm--often irreparable--of being forced to compete against products that incorporate and infringe its own patented inventions.”

Apple Nexus Requirement

• Apple Inc. v. Samsung Elecs. Co., 735 F.3d 1352, 1360 (Fed. Cir. November 18, 2013) (affirming denial of PI based on lack of irreparable harm)– “We hold that the district court was correct to

require a showing of some causal nexus between Samsung's infringement and the alleged harm to Apple as part of the showing of irreparable harm."

More Presumptions?

• Balance of Hardships• Public Interest– Abbott Labs. v. Andrx Pharms., Inc., 452 F.3d 1331, 1348

(Fed. Cir. 2006) ("Although the public interest inquiry is not necessarily or always bound to the likelihood of success on the merits . . . we agree . . . that the public interest is best served by enforcing patents that are likely valid and infringed."); EcoNova, Inc. v. DPS Utah, 2012 U.S. Dist. LEXIS 169479 (D. Utah 2013)

Other Considerations

• Advancing the Trial Date– Before or after beginning the hearing on a motion for a

preliminary injunction, the court may advance the trial on the merits and consolidate it with the hearing. Fed. R. Civ. P. 65 (a)(2)

• PI hearing has priority over scheduling other trials– Fed. R. Civ. P. 65 (a)(2)

• TRO?

Other Considerations• Bond (Fed. R. Civ. P. 65(c))

– Movant must provide “security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.”

– Celcis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 931 (Fed. Cir. 2012) (amount of a bond is at discretion of the trial court)

– GoTo.com, Inc. v. Walt Disney Co. (9th Cir. 2000) (“Disney would have us increase the bond 800 times to at least $20,000,000. We decline to do so, and look to Rule 65(c), which places within the discretion of the district court the amount of the bond…Were we to grant Disney’s request, we would risk denying GoTo access to judicial review since the preliminary injunction would not take effect until GoTo posted the bond. We decline to do so.”)

Defending the Patent Preliminary Injunction

• Raising Question of Validity or Noninfringement• Unexplained Delay

– High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551, 1557 (Fed. Cir. 1995) (Unexplained delay "militates against the issuance of a preliminary injunction by demonstrating that there is no apparent urgency to the request for injunctive relief.”)

• Public Interest– Only in unusual circumstance (medically important…)

• No nexus between infringing product/element and harm

Contempt of Injunction Order

• Fed. R. Civ. P. 65(d)(2) Persons Bound. The order binds only the following who receive actual notice of it by personal service or otherwise:– (A) the parties;– (B) the parties’ officers, agents, servants,

employees, and attorneys; and– (C) other persons who are in active concert or

participation with anyone described

Contempt

• Redesigned product– Not more than colorably different from enjoined

product?– Orders received before injunction, but fulfilled

after?– Hiding behind distributors?

Other Considerations

• Advancing the Trial Date– Before or after beginning the hearing on a motion for a

preliminary injunction, the court may advance the trial on the merits and consolidate it with the hearing. Fed. R. Civ. P. 65 (a)(2)

• Priority over other matters– Fed. R. Civ. P. 65 (a)(2)

Other Considerations (cont.)• Bond (Fed. R. Civ. P. 65(c))

– The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.

– Celcis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 931 (Fed. Cir. 2012) (“The amount of a bond is a determination that rests within the sound discretion of the trial court.”)

– Continental Oil Co. v. Frontier Refining Co., 338 F.2d 780, 782-783 (10th Cir. Utah 1964) (“Under this rule the trial judge has wide discretion in the matter of requiring security and if there is an absence of proof showing a likelihood of harm, certainly no bond is necessary.”)

– GoTo.com, Inc. v. Walt Disney Co. (9th Cir. 2000) (“Disney would have us increase the bond 800 times to at least $20,000,000. We decline to do so, and look to Rule 65(c), which places within the discretion of the district court the amount of the bond…Were we to grant Disney’s request, we would risk denying GoTo access to judicial review since the preliminary injunction would not take effect until GoTo posted the bond. We decline to do so.”)

A few additional thoughts . . .

Plan Before Filing Complaint- Line Up Experts and Other Witnesses- Consider Claim Construction Issues- Prepare for Bond (prepare client)

Make Order As Appeal-Proof as Possible– Findings of Fact, conclusions of law– Reasons for bond amount

Effect of PI on the Case (Pros and Cons)

• Pros– Early decision on merits– Removes infringing device from market quickly– Pressure for early settlement – Costs and time front-loaded – Overall $$$ lower

• Cons– Showing cards (e.g., claim construction/prior art)– Bond– Costs and time front-loaded – Big early $$$

Case Law Updates

• Teva Pharmaceuticals USA, Inc. v. Sandoz Inc., No. 13-854, slip op. at 1-2 (U.S. Jan. 20, 2015)– Claim Construction Deference– District court claim construction rulings involving factual

findings (e.g., extrinsic evidence outside patent) should be reviewed on appeal for clear error, rather than de novo.

– Cited FED. R. CIV. P. 52(a) (findings of fact must not be set aside on appeal unless they are clearly erroneous).