Federal Circuit Finds District Court Abused Its Discretion by Enjoining a Patent Holder from Making Allegations of Patent Infringement

Held: Under 35 U.S.C. §  287, a patentee is permitted to inform a potential infringer of the existence of its patent, and a court may only enjoin the patentee from such communication if the patentee has acted in bad faith.

Federal CircuitThe Federal Circuit recently reversed, vacated, and remanded a decision by the United States District Court for the Eastern District of Michigan, finding that the District Court had abused its discretion when it granted a preliminary injunction enjoining BlephEx, LLC from making allegations of patent infringement without a finding of bad faith and with no adequate basis to conclude that allegations of patent infringement would be false or misleading. See Myco Indust., Inc. v. BlephEx, LLC, No. 2019-2374, 2020 U.S. App. LEXIS 10510 (Fed. Cir. Apr. 3, 2020) (Before Newman, O’Malley, and Taranto, Circuit Judges) (Order for the Court, O’Malley, Circuit Judge).

The case arrived at the Federal Circuit by way of appeal by BlephEx after the District Court granted a motion for preliminary injunction filed by Myco Industries, Inc. Myco alleged that BlephEx had engaged in unprotected speech by making false and misleading claims that Myco’s product, the AB Max, had infringed the claims of U.S. Patent No. 9,039,718 (’718 patent) owned by BlephEx.

The ’718 patent is directed to a device for cleaning eyelids to treat ocular diseases such as blepharitis, meibomitis, and dry eye syndrome. After filing the ’718 patent, Dr. James Rynerson entered into a partnership with John Choate to develop and market a product based on the device disclosed in the ’718 patent. However, after a few years, Choate ended the partnership with Rynerson and became chairman of Myco. Myco subsequently developed and marketed the AB Max for treating blepharitis using a design similar to the device disclosed in the ’718 patent.

In early 2019, Rynerson and Choate both attended a trade show in New Orleans. Myco alleges that Rynerson approached Choate at the trade show and loudly accused the AB Max of infringing the claims of the ’718 patent in front of several of Myco’s potential clients. Subsequently, Myco filed a declaratory judgment seeking a finding that Myco had not infringed the claims of the ’718 patent and that the claims of the ’718 patent were invalid. Myco additionally sought injunctive relief under Michigan and federal unfair competition laws on the basis that Rynerson had alleged, in bad faith, that the AB Max infringed the claims of the ’718 patent.

The District Court granted the preliminary injunction concluding that Myco had a likelihood of success on the merits of its patent non-infringement claim because the ’718 patent claims were limited to devices for treating posterior blepharitis rather than the anterior blepharitis that Myco had advertised that its AB Max could treat.

On appeal, the Federal Circuit found that the District Court had improperly limited the claims of the ’718 patent to a device for treating posterior blepharitis. Therefore, the District Court should not have found that Myco had a likelihood of succeeding on the merits regarding the non-infringement claim. Furthermore, the District Court had abused its discretion when it granted a preliminary injunction enjoining BlephEx’s speech without a finding of bad faith. Influencing the Federal Circuit’s decision was the fact that the District Court had not found the speech to be either false or misleading, nor had the District Court shown that BlephEx had acted in bad faith when it made the allegations of patent infringement.

Finding that the District Court had abused its discretion in enjoining BlephEx from making allegations of patent infringement without a finding of bad faith, the Federal Circuit reversed and vacated the District Court’s preliminary injunction and remanded the case back to the District Court for further proceedings.

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One comment so far.

  • [Avatar for Mark Syman]
    Mark Syman
    April 12, 2020 12:36 pm

    The fedteral district court decision that was reversed is just one more example how some people, including judges, just don’t want inventors to have protection of their inventions. Shameful.