What is a patent-based injunction?
A patent-based injunction prohibits an infringer from stepping on the rights of the patent owner. The patent grant gives the patent owner the right to exclude others from selling a patented invention among other things. If the infringer continued to sell its version of the patented invention, then the patent rights of the patent owner would be harmed because the patent owner would not be excluding another from selling the patented invention.
An injunction, in broad terms, is a court order that a party refrains from certain activities (e.g., stop the manufacture or sale of specific items said to infringe a patent) or ordering a party to take some affirmative action to perform a specific activity (e.g., publish a joint news release notifying the public of a settlement or recalling certain products) to stop future harm from occurring or to help bring the harmed party back to its original position had the harm not occurred. Failure to comply with the court-ordered injunction may result in a fine or imprisonment of the enjoined party.
What is the purpose of a patent-based injunction?
The purpose of an injunction is to prevent the patent owner from experiencing continued irreparable harm caused by the infringement of the patent. The injunction deals with future harm and mitigating or eliminating that future harm. An injunction eliminates harm (e.g., lost sales) to the patent owner in the future because it prohibits infringers from competing against the patent owner in the marketplace.
Less frequently, a mandatory injunction compels an infringer to undertake a certain action (e.g., a news release notifying the public of the rights of the parties to a patent dispute). This type of injunction is typically an attempt to bring the party back to a position that they were in had the infringement never occurred.
A patent grants the patent owner the right to exclude others from making, using, selling, offering to sell, or importing their version of the patented invention. By preventing others from performing such acts, the patent-based injunction gives that right to exclude meaning or effect. Otherwise, the right to exclude granted by the patent would be meaningless. Anyone would be able to compete against the patent owner and the patent would not be able to exercise the right to exclude.
What are the types of patent-based injunction?
A patent-based injunction is usually either a preliminary injunction or a permanent injunction. A preliminary injunction occurs earlier during the patent lawsuit to stop the infringer from infringing the patent while litigation is ongoing. If a preliminary injunction is granted then the patent owner will usually have to post a bond in order to cover any harm to the alleged infringer. The bond covers any damage or harm to the alleged infringer incurred by the issuance of the preliminary injunction in the event the alleged infringer later prevails and the patent-based injunction is shown to be wrongfully issued. The preliminary injunction usually lasts until either it is converted into a permanent injunction at the end of the litigation, or until the court dissolves it because the underlying patent infringement is resolved in favor of the alleged infringer. Typically, a motion for preliminary amendment is filed immediately after or very soon after filing a complaint against the infringer.
A permanent injunction may be requested at the end of the lawsuit after the court or jury has decided that the actions of the accused infringer infringe upon the patent rights of the patent owner.
When does the court issue an injunction?
A preliminary injunction or a permanent injunction is only granted if the court finds the patent owner will suffer irreparable injury.
If the infringer voluntarily ceases the infringing activity, then there is arguably no need for an injunction because the infringer is complying with the rights adjudicated by the court. However, if the infringer makes statements or exhibits actions that indicate that he or she will not comply with the rights adjudicated by the court, then the court may issue an injunction to force the infringer to comply with the order of the court to stop infringement of the patent rights of the patent owner. Injunctions are “equitable” remedies so if the judge believes an irreparable injury is threatened and finds the accused infringer not credible, then an injunction will likely issue.
An injunction is an extraordinary relief and disfavored because the government does not want to get involved in policing the actions of the infringer. The favored remedy to bring the patent owner back to the position had the infringement not occurred is monetary compensation. Generally, monetary compensation or a damage award compensates for past injury, whereas an injunction prevents future harm. The court would rather compensate the patent owner with monetary compensation than engage in policing the infringer’s behavior. Nevertheless, injunctions may issue within the discretion of the court after a four-pronged analysis of the situation as described below.
What is the standard for obtaining a permanent injunction?
The standard for obtaining a permanent injunction is that the patent owner must demonstrate:
(1) that it has suffered an irreparable injury;
(2) that remedies available at law are inadequate to compensate for that injury;
(3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that the public interest would not be disserved by a permanent injunction.
eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006).
As discussed above, the relief for patent infringement that a court would prefer to grant is not an injunction but monetary compensation. Accordingly, the first and second factors in determining whether a patent-based injunction will be granted or denied are whether the patent owner has suffered an irreparable injury and whether monetary compensation cannot make the patent owner whole.
The third factor is relevant when the patent owner is a non-practicing entity. A non-practicing entity is an entity that is engaged solely in the licensing of a patent right to others and does not manufacture or sell a product covered by the patent. In this regard, the courts have denied non-practicing entities a patent-based injunction because the business model of a non-practicing entity is a licensing model or one that seeks monetary compensation.
The fourth factor is relevant when the public will be harmed by the patent-based injunction such as when a patent covers a lifesaving drug (e.g., breast cancer screening) or a technology (e.g., email push technology) that is in widespread use and many people will be affected by the grant of the injunction.
What is the standard for obtaining a preliminary injunction?
A patent owner seeking a preliminary injunction must establish that:
(1) he is likely to succeed on the merits,
(2) that he is likely to suffer irreparable harm in the absence of preliminary relief,
(3) that the balance of equities tips in his favor, and
(4) that an injunction is in the public interest.”
Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
The factors used to determine whether to grant or reject a motion for a preliminary injunction are similar to a permanent injunction. However, it is stated in terms of what is likely because the preliminary injunction occurs before there is final adjudication on the merits of the patent infringement dispute. The preliminary injunction occurs in general at the start of the lawsuit when the complaint is first filed.
Where do you get an injunction?
A patent-based injunction is sought either at the federal level or with the International Trade Commission (ITC). After filing a complaint with a federal court or with the ITC, the patent owner may file a motion for preliminary injunction or request a permanent injunction with the final decision of the court on infringement. The International Trade Commission handles patent disputes only for imported goods and only has the power to block the importation of goods. The federal courts have the power to award damages or monetary compensation and/or grant an injunction.
I invite you to contact me with your patent questions at (949) 433-0900. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego, and surrounding cities.