Posts Tagged: "permanent injunctions"

At a time when most policymakers rightly argue that China and other countries need to do more to clamp down on intellectual property infringement, overturning the four-factor eBay test would impose new hurdles and increase the PAE problem that Congress and the Supreme Court have fought to address over that last two decades. The risk that an implementer engages in “efficient infringement” has made the ITC an increasingly attractive forum, for at least some patent owners and notably not PAEs. ITC exclusion orders and cease and desist orders are the last vestige of the exclusivity promised to the right patent owners at the time they are granted a patent. Compared to proposed sections of the STRONGER Patents Act, the ITC strikes a balance between offering at least some patent owners the ability to prevent infringers from engaging in the never-ending game of “efficient infringement” while frustrating PAEs attempts to abuse the exclusionary remedies offered.  Congressional action should be reserved for a time when there is clear evidence that the eBay decision is harming U.S. businesses and those U.S. businesses are unable to obtain the relief they need at the ITC. At this time, there is no such evidence.

Earlier this afternoon, the United States Patent and Trademark Office (USPTO, National Institute of Standards and Technology (NIST) and the U.S. Department of Justice, Antitrust Division (DOJ), issued a Joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (“2019 Joint Policy Statement”). This Joint Policy Statement explains that “[c]onsistent with the prevailing law… injunctive relief, reasonable…

The order granted post-trial motions filed by Fitness Anywhere both for enhanced damages on the patent infringement findings as well as a permanent injunction against WOSS. Although it wasn’t likely that Fitness Anywhere would recoup the total enhanced patent damages of more than $11 million dollars from WOSS, having recently declared bankruptcy, Villeneuve noted that this decision set an important precedent for the company. Such a ruling was very important to TRX, which has lost sales and has had to layoff employees in California because of the actions of infringing parties. Villeneuve said that the single most important factor leading to the grant of permanent injunction was WOSS’ sale of infringing products after the jury verdict.

The trade dispute between the US and China started with a US accusation of intellectual property theft on the part of China.  Is China really “stealing” intellectual property?  I’m not so sure.  Perhaps the Chinese are stealing trade secrets, and if parties are engaged in such activities they should be punished, but there is a lot of taking that has been legitimized – even authorized – by the Congress and the Supreme Court in recent years.  U.S. patent law is today enabling foreign corporations, including Chinese corporations, to legitimately take intellectual property developed in the U.S.  That is not theft.  It’s just business.  And far more damage is being done to the U.S. as the result of legalized appropriation of patented innovations than could ever be done by the theft of trade secrets.

With the next Supreme Court term beginning in a few weeks we all need to come to terms with the fact that the U.S. has a compulsory licensing system, which is truly ironic. Trade missions, trade representatives, and governmental organizations travel the world preaching about the importance of a strong intellectual property system and how that starts with strong patent rights that are not subject to the whims and fancy of compulsory licensing. America should practice what it preaches. For some time, the United States hasn’t had a property rights-based patent system. That was merely confirmed in Oil States with the Supreme Court calling patents a government franchise, but the seeds were sown over 12 years ago when the Court decided eBay and removed exclusivity from the patent bargain.

Invariably, the Supreme Court takes a provision or two from pending legislation and makes it law. Will they do the same now that pro-patent reform is actually pending in Congress? After so many years of staying out in front of patent reform legislation that has weakened the U.S. patent system, dropped early stage investment by 62% and brought us a 40 year low in startups thus sending venture capital, startups and complete swaths of new technologies to China, how odd it will be if the Supreme Court doesn’t do the same now that pro-patent reform is actually pending in Congress.

Overrule eBay v. MercExchange and grant permanent injunctions to victorious patent owners as a matter of right. This singular change to U.S. patent laws – which is also found within the STRONGER Patent Act at Section 106 – would rectify much of the mischief caused by Congress and the Courts over the last 12 years. No single decision has so singularly tilted the balance between patent owners and technology implementers. Indeed, if you ask knowledgeable innovators and patent owners about the one decision or event they would undue if they could in order to bring the system back to some acceptable level of equilibrium and the answer will either be to overrule eBay v. MercExchange or to do away with post grant challenges at the PTAB.

The district court denied a request for a permanent injunction against Metaswitch after a jury found infringement because Genband failed to establish irreparable harm. More specifically, the court found that Genband failed to establish a causal-nexus between infringement and irreparable harm, i.e. that “the patent features drive demand for the product.” The Federal Circuit remanded because this causal-nexus requirement was too stringent. The Federal Circuit explained that the court could not have confidence as to the answer to the causation question under the standard properly governing the inquiry or whether there is any independent ground for the district court finding no irreparable harm or otherwise denying an injunction.

The experts in attendance reminded us of the insanity of the compulsory licensing system that now pervades the U.S. patent marketplace, which when explained in terms of real estate is obviously absurd. A man came home from work one day to find a strange family living in his dining room. He wanted to have them evicted but was told he would have to spend five years and millions of dollars proving in court that he owned the room where the invaders had pitched their tent. A judge finally found that indeed he owned his dining room. But instead of ordering the family’s eviction she ordered the invaders to pay rent to the homeowner in an amount hypothetically determined by calculating what he and the squatters would have agreed to before his unwelcome visitors moved-in.

Nichia Corporation (“Nichia”) sued Everlight Americas, Inc., Everlight Electronics Co., Ltd. and Zenaro Lighting (collectively, “Everlight”) for infringement of three of Nichia’s patents disclosing packaging designs and methods of manufacturing LED devices. Following a bench trial, the district court found that Everlight infringed all three patents and failed to prove the patents invalid. The district court denied Nichia’s request for a permanent injunction. Nichia appealed the district court’s refusal to enter a permanent injunction, and Everlight cross-appealed the district court’s infringement and validity findings. The Court affirmed on all grounds.

Whirlpool successfully argued that it would be irreparably harmed without the relief of permanent injunction in addition to the settlement agreement, which is executed separately of the court order. The recent court order for permanent injunction also affirmed the validity of all four utility patents asserted in the case along with finding that the defendant’s importation and sale of replacement water filters infringed on claims covered by the patents-in-suit.

While we have damaged our patent system, China has strengthened theirs. Job creation is stagnant, economic growth is anemic and the America Dream is dying. Congress must act to correct this damage and fix the patent system… The PTAB must be eliminated because no matter what changes are made to the rules it is difficult to see how this Board could ever be reigned in after starting and existing for the purpose of killing patents. Just changing the rules will not fix its systemic problems nor create a fairer process for patent owners.

Activist Supreme Court decisions in the last decade have been principally responsible for these changes, stimulated by aggressive technology company incumbent lobbying. The combination of these decisions has had a far greater effect on the patent system and the economy than the Court originally intended. The U.S. is now in a compulsory licensing regime in which large technology incumbents that control at least 80% of collective market share employ an “efficient infringement” model of ignoring patents and forcing patent holders to enforce patent rights in the courts.

Perhaps when the Senate Banking Committee convenes to consider the nomination of Wall Street attorney Jay Clayton as the new head of the Securities and Exchange Commission they should ask about efficient infringement and the infringe at will culture. What is your position, Mr. Clayton, on the legal obligation of a public company to shareholders? Should publicly traded companies inform shareholders that patent assets are worthless, or at least worth less, given the legal and regulatory climate in America? Should publicly traded companies systematically infringe and ignore all patent rights? Should publicly traded companies be using billions in shareholder monies to aggressively collect patent assets while they are simultaneously using millions to lobby against the viability of patents? What exactly do shareholders have a right to know?