http://www.ipwatchdog.com/2012/12/20/cafc-sanity-on-permanent-injunctions-a-twisted-sister-moment/id=31855/

Thanks to Paul Ackerman for the heads up on the case.

-Gene

But in the case of DESIGN patents, as here, many of them are easily and quickly re-designed around by minor ornamental appearance changes because that is all that design patents ever cover!

Thanks for the heads up. Indeed that is a VERY good decision. I will write about it tomorrow!

I love where he starts: “Of course the axiomatic remedy for trespass on property rights is removal of the trespasser.” And then: “Direct competition in the same market is certainly one factor suggesting strongly the potential for irreparable harm without enforcement of the right to exclude.”

Apple should be preparing their motion for reconsideration in like of Presidio Components!

Stay tuned for more tomorrow.

-Gene

How many times is willful infringement found? There can always be rather insignificant work arounds claimed. At least with a permanent injunction the patentee doesn’t have to start from scratch with a brand new lawsuit. All a permanent injunction really does is continue to vest the district court with ready-made authority to prevent future infringement. If infringement is of a different magnitude then a new case would be ordered. If it were the same claims on the same events then summary contempt proceedings could happen, or something in between like what happened in the TiVo/Dish case.

With respect to your statement about the posting of a huge bond, I think you are exaggerating a bit. If Apple wasn’t willing to post any bond pending appeal that might have been required they wouldn’t have asked for the permanent injunction in the first place. They also certainly wouldn’t post any bond in cash, and it seems unfathomable that this case would end in any other way than with a settlement. Thus, there is not going to be one party paying any other party a boat of money absent an agreement that ends all litigation. Thus, typing up a relatively modest amount of money in Apple terms (even if it were in the hundreds of millions) would hardly be a bad move given the leverage it would have given Apple to force a more favorable settlement.

Now, given that competitors cannot stop competitors from competing even with a patent the shift in the balance of negotiating power is overwhelmingly toward the infringer – Samsung. Thus, Judge Koh clearly got this wrong under the 4 factors test. There is no way the 4 factors test should produce a superior negotiating position for the losing party, who is an infringer that competes.

-Gene

I agree wholeheartedly with your assessment of how this will detract from the value of patents in general, and not just IT and Business Method patents. I can appreciate the well considered opinions expressed above in certain cases, like IT especially, where there might be dozens of patented features in any particular device or software.

In the vast majority of infringement scenarios, though, the logic of their decisions does not really make any sense. For small entities and independents, failing to get injunctive relief even after they have won an expensive infringement suit in many cases will result in them being driven out of business by larger entities gaming flawed court decisions.

Even if they are able to force compulsory licensing, the profits from that will be a small fraction of what they might otherwise have earned in profits from their own products. Interpretation the law in such a broad stroke manner seems to be very unwise and ignorant of the real world results of their actions in my opinion. Hobble small businesses, and they and the new jobs that they might have otherwise created might very well be gone before too many years go by.

Stan~

Futhermore, even before eBay, in cases involving huge competitive markets like this, if a permanent injunction was being granted, the patent owner should properly be required to post a huge bond to cover the huge damages to the enjoined defendent if the infringement decision is reversed on appeal. Or, a stay of the injunction for the appeal, as in eBay itself.

I hear you but 35 USC 283 does read as follows: “The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”

At least Thomas in eBay bothered to actually read and actually construe (reasonably in my opinion) what the language of the patent injunction statute says. By contrast, SCOTUS simply gives “lip service” to what 35 USC 101 (e.g., Bilski and Mayo) and 35 USC 103 (e.g., KSR International) says.

I don’t know. I suppose.

Like so many potentially harmful Supreme Court cases, eBay has been made worse by application in the district courts and Federal Circuit. Courts no longer seem to take into consideration that nature of the patent grant itself when weighing equities.

I don’t mind using 4 factors if that overwhelmingly leads to injunctions, which is the way it should be given that a patent is a right to exclude. But using 4 factors to eviscerate a patent is ridiculous in my humble opinion.

Still fuming!

-Gene

With all due respect, the problem with eBay is not the Opinion of the Court (written by Justice Thomas) which actually bothered to analyze 35 USC 283 and squarely relies upon the language in that section which says injunctions “may issue.” In fact, Thomas’ opinion is fairly balanced in also criticizing the district court which had denied the injunction in eBay as adopting “expansive principles suggesting that injunctive relief could not issue in a broad swath of cases,” including those where the patent holder offered to license the patent or did not practice the patented invention, as well as the tension of the district court’s ruling with the Supreme Court’s 1908 decision in Continental Paper Bag Company v. Eastern Paper Bag Company that rejected the “categorical” proposition that “a court of equity has no jurisdiction to grant injunctive relief to a patent holder who has unreasonably declined to use” the patented invention.

The problem lies with Kennedy’s bizarre concurring opinion in eBay which you’ve duly noted that Judge Koh relied upon. What is particularly distressing about Justice Kennedy’s concurring opinion is the following comments he makes about injunctive relief in the context of patents on “business methods”:

“[I]njunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test.”

Please understand that I agree with you that eBay has created some real difficulties for patentees getting permanent injunctions. I just want to provide some perspective as where the “real problem” lies in eBay, i.e., Kennedy’s concurring opinion. These unfortunate remarks in Justice Kennedy’s concurring opinion in the eBay case are what are causing the mischief with regard to the grant of permanent injunctions in patent infringement disputes. That was shown by the first case I saw applying eBay, namely z4 Technologies, Inc. v. Microsoft Corp. (E.D. Tex. 2006) where the District Court for the Eastern District of Texas denied a motion for entry of a permanent injunction after two patents were determined by a jury to be willfully infringed. In considering the second factor (adequacy of remedies available at law) in applying injunctions, the Eastern District of Texas noted that Justice Kennedy in eBay had “instructed courts to be cognizant of the nature of the patent being enforced and the economic function of the patent holder when applying the equitable factors.”