By Stephen E. Noona, Kristan B. Burch, Litigation

Once upon a time, not so very long ago, in a land known simply as the Eastern District of Virginia where cases proceeded with great haste, it was the birthright of all intellectual property owners near and far to wield the mighty Excalibur sword of injunction against all who infringed. With this presumptive right and the speed of the Commonwealth’s “docket of rocket,” any Jack or Jill could quickly vindicate the rights of their clients and become a killer of competition and an annihilator of evil, vanquishing all infringers large and small. News of this potent combination spread far and wide, drawing many suitors to the docket, and there was much happiness in the land.

Then, as if by magic, one of the docket’s judges questioned this birthright, proclaimed that the law had no clothes, and deigned to require more. This right, he claimed, was not automatic, and like other rights, must be weighed, measured and found not wanting. Though he was branded as a heretic and his judgment questioned, in the end, the Supreme Court of the land upheld this single judge and issued an edict known as eBay v. MercExchange, LLC., 547 U.S. 388 (2006). With one stroke of the mighty pen, the law of injunctions was permanently changed. Gone was the automatic right to brandish Excalibur, gone was the birthright to a permanent injunction, and gone was the power to stop evil infringers from stealing the valuable rights of the good and virtuous holders of IP. There was much strife and gnashing of teeth in the land. How had things gone so terribly wrong? Why had the world been so beseeched with such evil? How would holders of precious intellectual rights live happily ever after without the giant-killing threat of an injunction?

Has the Sky Really Fallen?
The tale of eBay is well known. Equally well known are the countless articles and predictions of impending change and doom to come. (“eBay Heralds the End of Injunctions”) But has that much really changed? Has the right to a permanent injunction really dissipated for the IP holder or have the courts simply begun treating the right to an injunction for intellectual property cases in line with well-established rules of equity governing injunctions in other instances? Although the final chapter of the tale has not been written, the emerging post e-Bay law suggests that while a presumptive right to an injunction is gone, the right to a permanent injunction in such cases is still very much alive, that permanent injunctions are regularly granted in most cases involving direct competition, and that predictions of the demise of permanent injunctions amount to more of a fairy tale than an actual nightmare.

eBay’s Alchemy and Application
The eBay case involved a claim by MercExchange that eBay’s online auction systems violated several of MercExchange’s business method patents. After a multimillion-dollar jury verdict of willful infringement against eBay, the trial court considered the plaintiff’s request for a permanent injunction. Prior to that time, most courts started from the perspective that a permanent injunction was typically granted to a patent owner who had proven infringement. Within the Eastern District of Virginia, however, there was a strong penchant for applying a traditional four-part balancing of hardship test applied in all cases for determining whether injunctive relief should be granted.¹ Under this balancing test, the Court found that an injunction should not be granted principally because MercExchange did not practice the patents at issue, existed for and touted its purpose as licensing the patents to make money, and the patents at issue were business method patents involving the combination of non-unique elements.²

On appeal, the Court of Appeals for the Federal Circuit swiftly reversed the trial court noting that “absent exceptional circumstances,” patent owners who establish infringement of a valid patent are entitled to injunctive relief.³ This decision was in line with case law that presumed that there was irreparable harm and a need for an injunction when the patentee proved infringement.⁴ The matter was appealed to the Supreme Court of the United States which has, of late, been engaged in a rewrite of the patent laws.⁵

In eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), the Supreme Court unanimously reversed the Court of Appeals for the Federal Circuit, holding that successful patent holders who establish infringement of a valid patent are not automatically entitled to a permanent injunction.⁶ The Supreme Court found nothing special about patents as opposed to other claims for such relief that justified a presumption of an injunction. Rather, the trial court must follow “well established principles of equity” ⁷ and establish four factors for injunctive relief.

A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, 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. The decision to grant or deny . . . permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. Neither the District Court nor the Court of Appeals below fairly applied these principles.

Id. at 391, 393. The Federal Circuit had not applied the test at all, and the trial court had applied the test too generally.

Consistent with the Supreme Court’s direction, upon remand, the District Court again refused to grant MercExchange an injunction. This time, the District Court made specific findings under the four-part test and provided a treasure trove of factors to justify its decision focusing in particular on the lack of irreparable harm.⁸ Chief among the factors that led the District Court to refuse an injunction were:

• Patentee did not practice the patent and consistently sought and touted its use of the patent to achieve royalties, not to protect market share, reputation or goodwill;⁹
• Patentee’s demonstrated willingness to license the patent;¹⁰
• Patentee did not directly compete with eBay;¹¹
• Patentee never sought a preliminary injunction;¹²
• The patent in question was a business method patent which combined non-unique elements in a unique fashion;¹³
• There was no actual proof of loss of market share;¹⁴ and
• Patentee had an adequate remedy at law.¹⁵

Favoring an injunction was the fact that eBay had been adjudicated as a willful infringer and had the potential to take away the majority of the market share due to its size and market hegemony, and the public interest favored maintaining the integrity of the patent system. In the end, however, the District Court balanced all of these factors and refused to grant an injunction.

Trail of Bread Crumbs
How then is the practitioner to find his or her way? Since eBay and eBay II, Courts have not been shy about granting injunctions to patentees that prove infringement. While the overall rate of injunctions being granted has declined from the pre-eBay rate, courts are still awarding injunctions to prevailing plaintiffs on a routine basis.¹⁶ Moreover, the Federal Circuit consistently has deferred to the discretion of district courts in granting or denying permanent injunctions when the four-part eBay test has been applied by the district court.¹⁷ Likewise, the Federal Circuit has reversed and remanded cases to district courts when the district courts failed to apply the eBay standard.¹⁸

While it is clear that the Supreme Court has mandated a case-specific analysis to justify an injunction,¹⁹ it has not specified how the four factors of the eBay test should be applied. Fortunately, some clear trends have emerged.²⁰

“Whatever harm thy charms and irreparable curse may bring….”
Following the lead from both eBay and eBay II, proving irreparable harm is king. Courts will no longer presume irreparable harm, and proving the irreparable harm factor has become the critical factor in obtaining a permanent injunction.²¹ Failure to prove this critical factor has even led several district courts to refuse to move onto the balance of the hardships analysis and simply deny injunctive relief.²² Examples of what constitutes irreparable harm abound:

• Loss of market share;²³
• Price erosion;²⁴
• Difficulty in calculating damages;²⁵ and
• Harm to reputation or goodwill.²⁶

“One against One, Trial by Mortal Combat be the Competition at Stake…”
Equally important, and perhaps as a surrogate for and enhancer of the irreparable harm factor, direct competition between the battling parties also has become a key determinant in the award of injunctive relief.²⁷ District courts continue to grant permanent injunctions when the patentee and the infringer are in direct competition with one another²⁸ although competition alone is not enough.²⁹ Showings of direct competition support a patentee’s ability to establish that it will suffer irreparable harm if a permanent injunction is not granted. Likewise, those parties who do not compete or only compete indirectly fair much worse in the injunction calculus.³⁰

“Gruff Going for the Troll Beneath the Bridge”
Although not universal, in most cases where the patentee does not commercially practice its invention, the courts have denied injunctive relief.³¹ This is particularly true for “trolls.”³² But this is not a bright-line rule – meaning a moving party may be entitled to a permanent injunction even when it does not practice the patent.³³ In particular, the courts are more receptive to the non-practicing party where the entity is a university or research facility that relies on others to help develop or perfect the invention.³⁴

“How then do you Spin Gold from Straw, Manikin?”
Patents are granted for all types of inventions. As noted by the Supreme Court in eBay, “when a patented invention is but a small component of the product the companies seek to produce,” “legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest.”³⁵ Several courts have thus added a qualitative weighing of the scope of the invention to their analysis, making injunctions more likely where the invention is pioneering and not just a small part of an overall product or method.³⁶ The decision in the eBay II case lends support to the primacy of utility patents over business method patents.³⁷

Miscellaneous Magic
In conjunction with the instructive themes set forth above, several other factors have been cited as supporting the denial of a permanent injunction, including:

• Willingness of the patentee to license its invention or similar technology;³⁸
• Proof of irreparable harm only to licensee as opposed to patentee;³⁹
• Failure to move for a preliminary injunction;⁴⁰
• Adjudication as willful infringer;⁴¹
• Expense and adverse effect of injunctive relief on marketplace (recall, redesign disruptive) given nature of invention;⁴²
• Infringer’s harm caused by infringing activity;⁴³
• Lack of any competing public interest to trump the public interest in maintaining the integrity of the patent system;⁴⁴ and
• Availability of sunset provisions to allow sufficient time for infringer to implement non-infringing substitutes.⁴⁵

“Mother Goose or the Goose that Laid the Golden Egg”
Understandably, the contours of post-trial relief have shifted for the successful plaintiff when an injunction is denied. With the erosion of the presumptive right to an injunction, there has come a renewed emphasis on post-verdict relief in two areas: sunset provisions – delaying the imposition of an injunction to allow the infringer to design around and lessen the impact to the public – and the award of post-verdict royalties where an injunction is denied to compensate the patentee for continued use. As discussed above, the courts have adopted the first on a regular basis where an injunction is to be awarded but time is needed to blunt the adverse impact of the injunction.⁴⁶

Where the injunction is denied and use is continued despite infringement, the court must fashion relief. In a recent line of cases, the Federal Circuit has approved the use of such relief where the “court’s task is to assess an appropriate level of damages for ongoing infringement under circumstances where an injunction is not warranted.”⁴⁷ Indeed, analogizing to antitrust law, the Federal Circuit concluded that, although not always awarded, “[u]nder some circumstances an ongoing royalty for patent infringement in lieu of injunction may be appropriate …”⁴⁸ Assessing post-judgment royalty rates is a matter of judicial discretion, typically after evidence and may be awarded by the court without the aid of the jury ⁴⁹; it should take into account additional economic factors arising out of the imposition of an on-going royalty: “[p]re-suit and post-judgment acts of infringement are separate and may warrant different royalty rates given the change in the parties’ legal relationship and other factors.”⁵⁰

Happily Ever After…
And so, it came to pass, that the good people of the docket were greatly enlightened and soon came to accept their Supreme Court’s edict. The prophecies of doom and angst never came to pass. Cases proceeded with order. Infringers still felt the sting of Excalibur in most cases, and the many suitors continued to come. Once more there was joy in the land. For the good people had learned a valuable and enduring lesson: for IP Holders who marshaled their facts in a responsible and thoughtful manner, there was relief and justice against the profligate and evil. Life was good, and they lived happily ever after…

¹As the Court prophetically stated: “Issuance of injunctive relief against [the defendants] is governed by traditional equitable principles, which require the consideration of (i) whether the plaintiff would face irreparable injury if the injunction did not issue, (ii) whether the plaintiff has an adequate remedy at law, (iii) whether granting the injunction is on the public interest, and (iv) whether the balance of hardships tips in plaintiff’s favor.” MercExchange, L.L.C. v. eBay, Inc, 275 F. Supp. 2d 695, 711 (E.D. Va. 2003) (citation omitted), aff’d in part, rev’d in part, 401 F.3d 1323 (Fed. Cir. 2005), vacated and remanded, 547 U.S. 388 (2006), on remand, 500 F. Supp. 2d 556 (E.D. Va. 2007).
²Id. at 711-15.
³eBay, Inc., 401 F.3d at 1339.
⁴Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1246-47 (Fed. Cir. 1989) (“Infringement having been established, it is contrary to the laws of property, of which the patent law partakes, to deny the patentee’s right to exclude others from use of his property. It is the general rule that an injunction will issue when infringement has been adjudged, absent a sound reason for denying it.”).
⁵Considering that the Supreme Court was quiet in the patent arena for many years, its recent decisions over the past decade and a half have marked a concerted effort to reign in patent rights and patent litigation. See, e.g., KSR v. Teleflex, 550 U.S. 398 (2007) (Court rewrote “obviousness” standard); Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) (extraterritorial infringement); MedImmune v. Genentech, 550 U.S. 118 (2007) (redefined case and controversy standard for patent licensees); Festo Corp. v Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002) (Court put limits on the doctrine of equivalents); Warner-Jenkinson Co., Inc. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997) (doctrine of equivalents); Markman v. Westview Instruments, Inc., 515 U.S. 1192 (1996) (construing patents relegated to trial court as a matter of law).
⁶MPT, Inc. v. Marathon Labels, Inc, 505 F. Supp. 2d 401, 420 (N.D. Ohio 2007), aff’d in part, rev’d in part, 258 F. App’x 318 (Fed. Cir. 2007).
⁷In his concurring opinion, Justice Roberts – perhaps reflecting his experience with the Fourth Circuit – opined that the majority opinion supported the general rule rather than overruled it. eBay, 547 U.S. at 395. Indeed, in so many words, while the emphasis changed, the result, like the results in so many cases before, should not as: “a page of history is worth a volume of logic.” Id. at 1842. Justice Kennedy disagreed, arguing that each case must be viewed through the prism of the four-factor test to allow for the courts to adapt to changes in technology and legal developments in the patent system. Id.
⁸MercExchange, L.L.C. v. eBay, Inc, 500 F. Supp. 2d 556, 568-69 (E.D. Va. 2007) (“eBay II”).
⁹Id. at 570.
¹⁰Id. at 569-70. The efforts to license were not to develop the technology but rather to monetize the patent.
¹¹Id. at 581.
¹²Id. at 573.
¹³Id. at 574. The Court was particularly mindful of the impact of the Supreme Court’s case of KSR, Int’l v. Teleflex, Inc., 550 U.S. 398 (2007) upon such business method patents.
¹⁴Id. at 577 (“‘Although the %u2018quantum of evidence’ required to prove irreparable harm remains unclear, the potential for loss of market share is insufficient to establish the same; otherwise, a scenario would never arise where an injunction did not issue.”).
¹⁵Id. at 582. Indeed, as noted by the Court, MercExchange with two employees, and no permanent office space was set up to monetize the patent, and it had publicly stated and acted consistently to obtain royalties in exchange for a license to its intellectual property.
¹⁶A listing of post-eBay injunction cases through June 2009 showing the cases in which an injunction was granted (68) and those in which an injunction was denied (25) may be found at http://www.patstats.org/Injunction_rulings_post-eBay_to_6-19-09.post.xls’. Additional statistics relating to the topic may be found at: http://www.patstats.org/Patstats3.html’. In a September 2009 update, the authors of that site conclude:
Our recent posts updating grants and denials of permanent injunctions show the grant rate going down. In the two years immediately following eBay the grant rate was about 75%, not far below the pre-eBay rate of 84%. In the past year the rate has dropped to 60%. As noted by other observers, prevailing patentees who are operating under the patents in suit have the best chance of obtaining permanent injunctive relief, and entities that are purely licensing vehicles have the least chance.
¹⁷See, e.g., Fresenius USA, Inc. v. Baxter Int’l, Inc., Nos. 2008-1306, 2008-1331, 2009 U.S. App. LEXIS 20155 (Fed. Cir. Sept. 10, 2009) (holding that the district court did not abuse its discretion when it granted permanent injunctive relief but vacating injunction and remanding to district court to revise or reconsider the injunction in light of the reversal of the district court’s grant of JMOL regarding the ‘027and ‘151 patents); Acumed LLC v. Stryker Corp., 551 F.3d 1323 (Fed. Cir. 2008) (affirming district court’s grant of permanent injunction where district court did not abuse its discretion); Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683 (Fed. Cir. 2008) (holding that the district court did not abuse its discretion in granting a permanent injunction but reversing injunction as it pertains to the ‘686 patent and remanding based on reversal of the jury verdict on infringement); Voda v. Cordis Corp., 536 F.3d 1311 (Fed. Cir. 2008) (affirming district court’s denial of permanent injunction where moving party did not establish irreparable harm); cf Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363 (Fed. Cir. 2008) (vacating injunction because its issuance was an abuse of discretion by the district court).
¹⁸Ecolab, Inc. v. FMC Corp., 569 F.3d 1335 (Fed. Cir. 2009) (vacating district court’s denial of motion for permanent injunction and remanding case to district court to perform analysis required by eBay); Acumed LLC v. Stryker Corp., 483 F.3d 800 (Fed. Cir. 2007) (vacating permanent injunction and remanding case to district court to reconsider four-factor test as propounded by eBay). In particular, the Federal Circuit affirmed the grant of a permanent injunction in a review of a case decided by the Eastern District of Virginia in Verizon Services Corporation v. Vonage Holdings Corporation, 503 F.3d 1295, 1310-11 (Fed. Cir. 2007).
¹⁹Note that the Federal Circuit still clings to the thought that “[i]t remains an open question ‘whether there remains a rebuttable presumption of irreparable harm following eBay.'” Broadcom Corp., 543 F.3d at 702 (citing Amado v. Microsoft Corp, 517 F.3d 1353, 1359 n.1 (Fed. Cir. 2008)).
²⁰These trends are helpful in assessing the injunction analysis, but none alone is determinative. For as the Supreme Court cautioned “traditional equitable principles do not permit such broad classifications” as presuming that a patentee cannot establish irreparable harm based on a patentee’s “willingness to license its patents” or “its lack of commercial activity in practicing the patents.” 547 U.S. at 393; see also Broadcom Corp., 543 F.3d at 703 (affirming District Court’s grant of injunction after proof of irreparable harm despite indirect competition, failure to practice and several other indicia that in other instances have led to the denial of injunctive relief).
²¹Sundance, Inc. v. Demonte Fabricating, Inc., No. 02-73543, 2007 U.S. Dist. LEXIS 158 (E.D. Mich. Jan. 4, 2007) (denying injunction where plaintiff failed to tie alleged lost sales to the nature of defendant’s infringement, resulting in no showing of irreparable harm), 2007 U.S. Dist. LEXIS 77728 (E.D. Mich. Oct. 19, 2007) (granting permanent injunction based upon changed circumstances).
²²Medtronic Sofamor Danek USA, Inc. v. Globus Med., Inc., Civil Action No. 06-4248, 2009 U.S. LEXIS 61332 (E.D. Pa. July 17, 2009) (denying permanent injunction when irreparable harm evidence was not presented); Telcordia Techs., Inc. v. Cisco Sys., Inc., 592 F. Supp. 2d 727 (D. Del. 2009) (denying permanent injunction where only evidence before court suggests that moving party will not suffer irreparable harm if injunction is denied).
²³Funai Elec. Co. Ltd. v. Daewoo Elec. Corp., 593 F. Supp. 2d 1088, 1111 (N.D. Cal. 2009) (“the evidence in the record establishes that Funai has suffered irreparable harm in the form of loss of market share, particularly with respect to the impact Daewoo’s infringement had on Funai’s relationship with Target”); Becton Dickinson and Co. v. Tyco Healthcare Group LP, Civil Action No. 02-1694 GMS, 2008 U.S. Dist. LEXIS 87623, *10 (D. Del. Oct. 29, 2008) (finding that irreparable harm was established where “BD has lost market share to Tyco as a result of Tyco’s sales of Magellan products”); Trueposition Inc. v. Andrew Corp., 568 F. Supp. 2d 500, 532 (D. Del. 2008) (“As plaintiff and defendant are the only suppliers in a two-supplier market, defendant’s infringement has necessarily affected plaintiff’s market position. On this record, plaintiff has established irreparable harm.”).
²⁴Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No. C 03-1431 SBA, 2008 U.S. LEXIS 79689, *11 (N.D. Cal. April 4, 2008) (“The law favors Baxter’s right to full value of its property, particularly the ability to keep it out of its main competitor’s hands.”), vacated on other grounds, Nos. 2008-1306, 2008-1331, 2009 U.S. App. LEXIS 20155 (Fed. Cir. Sep. 10, 2009); Atlanta Attachment Co. v. Leggett & Platt, Inc., Civil Action No. 1:05-CV-1071-ODE, 2007 U.S. Dist. LEXIS 96872, *19 (N.D. Ga. Feb. 23, 2007) (granting permanent injunction where plaintiff has presented evidence of prices erosion in the form of a declaration that “it has had to significantly lower the price of its rufflers in response to the pricing of L&P’s infringing rufflers”); MPT, Inc., 505 F. Supp. 2d at 420-21 (granting a permanent injunction where royalties “will not stop the erosion of MPT and TKG’s market”).
²⁵Callaway Golf Co. v. Acushnet Co., 585 F. Supp. 2d 600, 621 (D. Del. 2008) (“Future damages are informed by past damages, which are undeterminable to the extent that the harm to plaintiff’s market position, goodwill and reputation is unknown.”), aff’d in part, vacated in part on other grounds, 576 F.3d 1331 (Fed. Cir. 2009); Emory Univ. v. Nova Biogenetics, Inc., Civil Action No. 1:06-CV-0141-TWT, 2008 U.S. Dist. LEXIS 57642, *13 (N.D. Ga. July 25, 2008) (“the negative effects of the Plaintiffs’ potential loss in goodwill, market share, and prestige are real, and would be difficult to quantify solely through monetary damages”).
²⁶Amgen, Inc. v. F. Hoffmann-La Roche Ltd., Civil Action No. 05-12237-WGY, 2008 U.S. Dist. LEXIS 77343, *135 (D. Mass. Oct. 2, 2008) (holding that irreparable harm had been established because if a permanent injunction was denied, the infringer would enter the market as a direct competitor to plaintiff and sales by the infringer would result in “lost profits, market share, and good will” for the plaintiff), aff’d, 296 F. App’x 69 (Fed. Cir. 2008); 800 Adept, Inc. v. Murex Sec., Ltd., 505 F. Supp. 2d 1327, 1337 (M.D. Fla. 2007) (granting permanent injunction where plaintiff was losing market position and goodwill), aff’d in part, vacated in part, rev’d in part on other grounds, 539 F.3d 1354 (Fed. Cir. 2008) (reversing District Court’s motion for judgment of non-infringement as a matter of law and vacating infringement damages award and permanent injunction).
²⁷Callaway Golf Co. 585 F. Supp. 2d at 619 (“Courts awarding permanent injunctions typically do so under circumstances where plaintiff practices its invention and is a direct market competitor.”); Emory Univ. v. Nova Biogenetics, Inc., Civil Action No. 1:06-CV-0141-TWT, 2008 U.S. Dist. LEXIS 57642, *12 (N.D. Ga. July 25, 2008) (holding that plaintiffs established irreparable harm where they are direct competitors with defendant).
²⁸Transamerica Life Ins. Co. v. Lincoln Nat’l Life Ins. Co., 625 F. Supp. 2d 702 (N.D. Iowa 2009) (finding that patentee would be irreparably harmed by use of its claimed method by a direct competitor); Mass Engineered Design, Inc. v. Ergotron, Inc., Case No. 2:06 CV 272, 2009 U.S. Dist. LEXIS 34173 (E.D. Tex. Apr. 17, 2009) (finding that trial testimony was overwhelming that defendant was a direct competitor to plaintiff); Joyal Prods., Inc. v. Johnson Elec. N. Am., Inc., Civil Action No. 04-5172 (JAP), 2009 U.S. Dist. LEXIS 15531 (D.N.J. Feb. 27, 2009) (holding that competitors of defendant would have little incentive to purchase a patent that does not give them exclusivity); cf Praxair, Inc. ATMI, Inc. 479 F. Supp. 2d 440 (D. Del. 2007); IMX, Inc. v. LendingTree LLC, 469 F. Supp. 2d 203 (D. Del. 2007) (injunction denied despite competition).
²⁹Advanced Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc., 579 F. Supp. 2d 554 (D. Del. 2008) (denying permanent injunction where parties were direct competitors as the moving party was unable to show any sales which it had lost or stood to lose); see also Finjan Software, Ltd. v. Secure Computing Corp., C.A. No.06-369 (GMS), 2009 U.S. Dist. LEXIS 72825 (D. Del. Aug. 18, 2009) (granting permanent injunctions where moving party showed infringer was a direct competitor and established loss of market share); Sensormatic Elec. Corp. v. Tag Co. US, No. 06-81105-IV-Hurley/Hopkins, 2008 U.S. Dist. LEXIS 102690, *82 (S.D. Fla. Dec. 19, 2008) (granting a permanent injunction where plaintiff faced future loss of market share and erosion of the AM label market caused by defendants’ continued infringement).
³⁰Mass Engineered Design, Inc. v. Ergotron, Inc., No. 2:06 CV 272, 2009 U.S. Dist. LEXIS 34173, *85 (E.D. Tex. April 17, 2009) (“The fact that there is direct competition in a marketplace weighs heavily in favor of a finding of irreparable harm.”); Advanced Cardiovascular Sys., 579 F. Supp. 2d at 559 (denying injunction where there was “no indication that Medtronic is currently drawing bare-metal stent sales away from ACS, as compared to BSC”).
³¹Orion IP, LLC v. Mercedes-Benz USA, LLC, Case No. 6:05 CV 322, 2008 U.S. Dist. LEXIS 108683, *12 (E.D. Tex. Mar. 28, 2008) (“Orion does not practice the patented invention, does not compete in the marketplace with Hyundai, nor does research or develop new technologies for which it requires licensing funds to finance its efforts%u2026.Orion’s sole purpose is to license existing patents. Accordingly, money damages is an adequate compensation for any ongoing infringement.”); Respironics, Inc. v. Invacare Corp., Civil Action No. 04-0336, 2008 U.S. Dist. LEXIS 1174, *13 (W.D. Pa. Jan. 8, 2008) (denying permanent injunction where plaintiff never made, offered for sale, or made a trade show device displayed for a short time at a trade show).
³²Justice Kennedy specifically noted the downside to automatically issuing injunctions to trolls stating: “[a]n industry has developed in which firms use patents not as a basis for producing and selling goods, but, instead, primarily for obtaining licensing fees. … Issuing trolls automatic injunctions upon a finding of infringement allows them to extort settlements that vastly exceed the true economic value of their patents and imposes enormous social costs, particularly in the computer and internet industries…” eBay, 547 U.S. at 396-97.
³³Bartex Research, LLC v. FedEx Corp., 611 F. Supp. 2d 647, 652 (E.D. Tex. 2009).
³⁴ Id. (holding that plaintiff may still be entitled to a permanent injunction even though it does not practice its patent); Commonwealth Scientific and Ind. Research Org. v. Buffalo Tech. Inc., 492 F. Supp. 2d 600, 604 (E.D. Tex. 2007) (“CSIRO is a research institution and relies heavily on the ability to license its intellectual property to finance its research and development.”).
³⁵eBay, 547 U.S. at 396-97 (Justice Kennedy).
³⁶800 Adept, Inc., 505 F. Supp. 2d at 1337 (“where a company pioneers an invention in the marketplace, irreparable harm flows from a competitor’s attempts to usurp the pioneering company’s market position and goodwill”).
³⁷eBay, 500 F. Supp. 2d at 574.
³⁸Innogenetics, N.V. v. Abbott Labs., 578 F. Supp. 2d 1079, 1104 (W.D. Wis. 2007) (granting permanent injunction; monetary damages are not enough to make whole where plaintiff was awarded damages “equal to what defendant would have paid had it agreed with plaintiff to take a license to the invention claimed by the ‘704 patent”), vacated, 512 F.3d 1363 (Fed. Cir. 2008) (holding that granting an injunction was an abuse of discretion); MGM Well Servs., Inc. v. Mega Lift Sys., LLC, 505 F. Supp. 2d 359, 379 (S.D. Tex. 2007) (“The ‘060 Patent gives MGM the right to exclude others from practicing its patent, and MGM has proven an existing policy not to license its patented technology.”), aff’d, 264 F. App’x 900 (Fed. Cir. 2008); Novozymes A/S v. Genencor Int’l, Inc., 474 F. Supp. 2d 592, 612 (D. Del. 2007) (“The Court also rejected a categorical rule that a patentee’s willingness to license its patent is enough to establish that the patentee would not suffer irreparable harm in the absence of an injunction.”).
³⁹See, e.g., Voda v. Cordis Corp., 536 F.3d 1311, 1329 (Fed. Cir. 2008) (alleged harm to exclusive licensee but noting that despite result, “patent owners that license their patents rather than practice them ‘may be able to satisfy the traditional four-factor test’ for permanent injunction …”).
⁴⁰eBay, 500 F. Supp. 2d at 573.
⁴¹eBay, 500 F. Supp. 2d at 583-84; Muniauction, Inc. v. Thomson Corp., 502 F. Supp. 2d 477, 483 (W.D. Pa. 2007) (“The jury’s finding that defendants have willfully infringed plaintiff’s patent for six years supports our conclusion that plaintiff has suffered irreparable injury to its patent rights, for which there is no adequate remedy at law.”), rev’d in part, vacated in part on other grounds, 532 F.3d 1318 (Fed. Cir. 2008), cert. denied, 129 S.Ct. 1585 (2009).
⁴²See, e.g., z4 Techs., Inc. v. Microsoft Corp., 434 F. Supp. 2d 437, 443-44 (E.D. Tex. 2006); Paice LLC v. Toyota Motor Corp., No. 2:04-CV-211, 2006 U.S. Dist. LEXIS 61600 (E.D. Tex. Aug. 16, 2006), aff’d in part, vacated in part on other grounds, and remanded, 504 F.3d 1293 (Fed. Cir. 2007). But note that the Federal Circuit approved the amelioration of such adverse effects by the district court through a sunset provision. Voda, 536 F.3d at 1329.
⁴³Broadcom Corp., 543 F.3d at 704 (affirming permanent injunction in face of arguments of harm claimed by infringer noting “[o]ne who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected”).
⁴⁴Acumed LLC v. Stryker Corp., 04-CV-513-BR, 2007 U.S. Dist. LEXIS 86866, *20 (D. Or. Nov. 20, 2007) (“the court concludes there is not sufficient objective evidence of any public-health issue in the form of screw back-out problems with the Polarus product to find the public interest would be disserved by a permanent injunction against Defendant”); Martek Biosciences Corp. v. Nutrinova Inc., 520 F. Supp. 2d 537, 559 (D. Del. 2007) (“Lonza has presented no evidence nor made any argument that a permanent injunction would harm the public”) aff’d in part, rev’d in part, Nos. 2008-1459, 2008-1476, 2009 WL 2780367 (Fed. Cir. 2009); 800 Adept, Inc., 505 F. Supp. 2d at 1338 (granting permanent injunction where there is no evidence of record that suggests that the infringing services are related to any issue of public health or some critical public interest); MPT, Inc., 505 F. Supp. 2d at 421 (granting permanent injunction where there “is no critical public need for use of placards to practice the patented method”).
⁴⁵Broadcom Corp., 543 F.3d at 704 (noting “[w]e agree that the sunset provisions mitigate the harm to the public and that the district court did not abuse its discretion in fashioning a remedy that protects [the patentee’s] rights while allowing [the infringer] time to develop non-infringing substitutes.”); see also Verizon Servs. Corp., 503 F.3d at 1311, n.12 (approving the use of sunset provisions to blunt harm to public and/or infringer).
⁴⁶See n. 45.
⁴⁷Amado v. Microsoft Corp., 517 F.3d 1353, 1361 (Fed. Cir. 2008), citing Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1317 (Fed. Cir. 2007); see also Fresenius USA, Inc. v. Baxter Int’l, Inc., 2008-1306, 2008-1331, 2009 U.S. App. LEXIS 20155 (Fed. Cir. Sept. 10, 2009). Obviously, this would be unnecessary if the parties’ agreed to license terms.
⁴⁸Paice, 504 F.3d at 1314.
⁴⁹This, of course, does raise some Seventh Amendment issues, chiefly whether the imposition of the post-verdict royalties by the court deprives the patentee of its right to a jury on this damages issue. Paice is supportive of the conclusion that the Federal Circuit does not think this is a problem. See also Fresenius USA, Inc., 2009 U.S. App. LEXIS 20155 (remanding determination of post-verdict royalties for determination by court in light of other rulings).
⁵⁰Paice 504 F.3d at 1317.

This article originally appeared in the November/December issue of The Federal Lawyer and is reprinted with permission. 

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