Federal Circuit Affirms Grant of Preliminary Injunction to Patent Owner

“The Court held that the fact that other infringers may be in the marketplace does not negate irreparable harm. It also held that the loss… of customers may have far-reaching, long-term impact on its future revenues…”

Metalcraft of Mayville, Inc. v. Toro Co., (Fed. Cir. Feb. 16, 2017) (Before Moore, Hughes, and Stoll, J.) (Opinion for the court, Moore, J.)

In a February 16, 2017, decision, the Federal Circuit affirmed the district court’s grant of a preliminary injunction to Metalcraft of Mayville, Inc., d/b/a Scag Power Equipment (“Scag”). The injunction prevents The Toro Company and its wholly owned subsidiary Exmark Manufacturing Co., Inc. (collectively “Toro”) from making, using, selling, and offering to sell lawnmowers with platform suspension systems that infringe Scag’s ’475 patent.

Scag manufactures commercial riding lawnmowers. Scag developed a suspended operator platform to improve its mowers, which is disclosed and claimed in the ’475 patent. The patent discloses a suspended operator platform for a ride-on lawnmower or other riding light utility vehicle connected to a rigid chassis by a suspension system. Toro introduced riding lawnmowers with suspended operator platforms to compete with Scag’s line. Scag filed an infringement action against Toro and simultaneously filed a motion for a preliminary injunction. The district court granted Scag’s motion for a preliminary injunction. Toro filed a notice of appeal and a motion to stay the preliminary injunction. The district court denied Toro’s motion to stay the injunction. Toro appealed.

To obtain a preliminary injunction, a party must establish: (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.

The Federal Circuit first examined Scag’s likelihood of success on the merits. A patentee must show that it will likely prove infringement of the asserted claims and that its infringement claim will likely withstand the alleged infringer’s challenges to patent validity and enforceability. Toro argued non-infringement because the accused devices do not meet the claim limitation “an entire body of an operator.” Toro explained that its steering controls are mounted to the chassis, not the operator platform, and the operator’s hands and arms are not supported by the platform. The district court erroneously rejected this defense because the court’s construction of “an entire body of an operator” excludes the operator’s hands and arms. The Court rejected Toro’s argument, holding that the claims do not require that the steering controls be mounted on the suspended operator platform. It reasoned that the ’475 patent makes clear that it is the suspended operator platform that supports “an entire body of an operator” and that the operator platform is a separate and distinct element from the steering controls.

The Court also found that Toro improperly equated supporting the entire body of an operator with isolating every aspect of an operator’s body from shock loads. Instead, the patent treats supporting the entire body of an operator and isolating the operator from shock loads as two distinct aspects of the claimed invention. The Court reasoned that the patent uses precise language to differentiate between the distinct concepts of supporting and isolating. Additionally, the claim language itself keeps these concepts separate.

The Court then analyzed Toro’s obviousness argument. Toro argued that claim 21 would have been obvious in light of the “Henriksson” and “Sasaki” patents. The Court disagreed, holding that the district court correctly acknowledged that it is not enough for Toro to demonstrate that elements of the claimed invention were independently known in the prior art. Toro provided no explanation or reasoning for concluding that one of skill in the art would have combined these particular references to produce the claimed invention. The Court noted that while “[t]he obviousness analysis cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation,” as explained in KSR, “we also recognize that we cannot allow hindsight bias to be the thread that stitches together prior art patches into something that is the claimed invention.”

Next, the Court found that the district court did not abuse its discretion in holding that Scag is likely to suffer irreparable harm in the absence of an injunction. Toro argued that the district court ignored evidence it presented of at least twelve other companies that sell mowers designed to decrease shock loads to the operator. It also argued that the court erred in accepting Scag’s argument that brand loyalty resulted in the loss of “a potentially lifelong customer.” The Court held that the fact that other infringers may be in the marketplace does not negate irreparable harm. It also held that the loss by Scag of customers may have far-reaching, long-term impact on its future revenues, and the sales lost by Scag are difficult to quantify due to “ecosystem effects,” where one company’s customers will continue to buy that company’s products and recommend them to others.

The Court then considered the public interest. Toro argued that its harm outweighed Scag’s and the injunction harms the public because it disrupts the status quo by removing from the public lawnmowers that had been available for over a year. The Court held that the district court did not abuse its discretion in holding that the balance of equities tipped in Scag’s favor and that the injunction was in the public interest.

Finally, the Court rejected Toro’s argument that the injunction was overly broad. The district court’s order enjoins Toro from “making, using, selling, and offering to sell lawnmowers equipped with platform suspension systems that infringe Scag’s patent.” The Court held that this injunction is not overbroad, as the Decision and Order in which the district court granted the motion discusses both the claims at issue as well as Toro’s accused products.

A preliminary injunction was appropriate when non-infringement depended on an erroneous claim construction; the evidence did not show the proposed combination of references for non-obviousness was enabled; irreparable harm was likely despite other competition, and the injunction tipped in favor of the public interest.

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Joseph Robinson

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

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Discuss this

There are currently 4 Comments comments.

  1. Eric Berend February 25, 2017 5:48 pm

    Years after Ebay v. MercExchange; here, the CAFC finally acknowledges that language supporting grounds for issuing an injunction against patent infringement, actually exist in that SCOTUS decision. Yet, the salutary effect of providing guidance as to the CAFC’s ‘bright line’ application of the “new” jurisprudence (‘eBay’ dates from 2007 and is obviously years pre-AIA), has, for far too long, been lacking.

    Obviously, this work is long overdue. As a potential party of specific enforcement concerns; from my point of view, these Judges have been falling down on the job. If we are to be affected by such radical changes so as to form a ‘sea change’; and, despite whatever disagreement an inventor or patent practitioner may have with said changes; are subject to its exigencies, then: there is a Court responsibility to establish the new rules in their embodiment of judicial practice or “case law”, and to have these clearly explained.

    Part of the harmful effects of these nearly wholesale changes, is to leave major aspects in a state of relative limbo; wherein the legal ‘lay of the land’ is left obfuscated and seemingly arbitrary. It is often said of ‘Wall Street’, that the financials markets ‘hate uncertainty’. Is this not a fundamental concern in any endeavor: to not know, where risk comes from or what it is based upon?

    Inventors also. are expected to invest of our time, resources and ingenuity; in attempting to succeed. Why should we see this unknown or arbitrary risk issue, any differently?

  2. angry dude February 25, 2017 6:41 pm

    Too late

    SV *willfull* patent infringement liabilities are enormous – they snowballed over the last 10 years

    restoring injunctions like they used to be pre-Ebay (e.g. NTP vs RIM) will lead to demise of many SV corporations and huge stock market losses

    The doc said ‘to the morgue’, to the morgue it is!

  3. Anon February 26, 2017 9:41 am

    Of interest here is that this a preliminary injunction.

    the damage of eBay of course, was that the use of injunction when infringement had been proven was curtailed.

    These are different beasts – and one would perhaps have expected the Supreme Court view to be more apropos to the preliminary scenario, as opposed to the proven scenario (and which shows just how anti-patent the Supreme Court really is).

    There is truly only one long term remedy for such institutional animus: jurisdiction stripping of the non-original jurisdiction of hearing patent appeals from the Supreme Court by Congress under its Constitutional authority, and in preserving Marbury, setting up a new (and untainted) Article III patent court.

    Any other action simply runs the risk of the Court rewriting what Congress does to suit the Court’s desired Ends.

  4. Caesar Salazar February 26, 2017 6:23 pm

    Anon,

    While you are correct about the jurisdiction-stripping power of Congress and right about setting up an alternative article III court to preserve fundamental due process to litigate claims, your proposed solution is a stretch. SCOTUS has historically been the court of last resort in patent cases, the public seems to support it, and any attempt by a Congressman or Senator to introduce a statute like you say would be hit with bad PR immediately.