49 (12) (1997), p. 56.
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One of the remedies available to a patent owner ("plaintiff") in the United States against an alleged infringer ("defendant") of the patent is an injunction to prevent future infringement by the defendant. The availability of an injunction is a powerful right of the plaintiff that can be granted by the federal district court judge who is hearing the case.
In general, there are two types of injunctions available in a patent-infringement lawsuit. The first is a preliminary injunction, which, as its name implies, is granted very early in a court action for patent infringement and restrains the defendant from infringing the patent during the pendency of litigation. In the event the plaintiff wins at trial, the preliminary injunction most likely will be converted into a permanent injunction. In many cases, the issuance of a preliminary injunction effectively ends the matter for all practical purposes between the parties, as this is a crippling blow to the defendant. Conversely, the denial of a preliminary injunction, while not fatal to the plaintiff, does indicate that the plaintiff's case has some problems to overcome.
The issuance of a preliminary injunction is an extraordinary remedy to be used only to preserve the existing state of things between the parties. Generally, courts have set forth four requirements for granting a preliminary injunction:
Whether or not the plaintiff can show a likelihood of success on the merits is usually the most hotly contested issue in a preliminary injunction hearing. The plaintiff has the burden of showing that the defendant infringes the plaintiff's patent. The question of infringement involves construing the scope of the claims of the patent, which define the invention, and then determining whether the defendant's product or method falls within the scope of those claims. The defendant can counter by arguing that the scope of the plaintiff's claims are not as the plaintiff describes, and thus, the defendant's product or method falls outside the scope of those claims. In all but the most clear cases, proof of infringement can involve the testimony of several persons from both the plaintiff's and defendant's sides, including patent and technical experts. If the defendant raises substantial questions as to infringement, a judge may be reluctant to impose a preliminary injunction.
The defendant can also challenge the validity of the patent. An issued U.S. patent is presumed to be valid, so the burden shifts to the defendant to show invalidity. Again, any substantial questions raised by the defendant concerning validity can adversely affect the ability of the plaintiff to obtain a preliminary injunction.
Irreparable harm is often presumed when the plaintiff has satisfactorily shown that the defendant is infringing the patent and the patent is valid. One reason that has been advanced for presuming irreparable harm is that a patent has a finite life and to allow the defendant to continue to infringe the patent during lengthy patent-infringement lawsuits would impose irreparable harm on the plaintiff. However, courts have denied preliminary injunctions to plaintiffs on the ground that patent infringement can be remedied by the defendant's paying damages to the plaintiff once infringement has been found in a trial.
Balancing the harms of the plaintiff and defendant is very fact specific and is basically a way for the court to exercise its discretion in granting or withholding a preliminary injunction. In most cases, courts will usually grant the preliminary injunction unless the balance of hardship tips decidedly in the defen-dant's favor. For example, if a preliminary injunction will idle a major manufacturing plant and put hundreds of employees out of work, the court may decide that it would be better to maintain the status quo and determine liability only after a full trial, thus avoiding the idling of the plant and workers.
The public interest requirement is rarely invoked. Defendants have unsuccessfully argued that preventing the sale of the infringing product limits consumer choice and in products involving critical public interest, such as pharmaceuticals, is a burden on the public; however, courts have no problem in finding that the public interest in upholding valid patents outweighs this alleged public interest.
If a preliminary injunction is issued, the plaintiff will nearly always have to post a bond for securing any costs or damages that the defendant will suffer if the preliminary injunction is later found to be improperly granted. This gives the defendant some assurance that if something arises after the preliminary injunction is issued, such as, for example, a heretofore unknown prior-art reference that clearly invalidates the patent, the defendant's costs and damages for ceasing the manufacture and sale of the product can be recovered from the proceeds of the bond. The amount of the bond depends on the circumstances of the case and is left to the court's discretion. Many times, the plaintiff will use the services of a bail bondsperson or insurance company to post the bond, with the plaintiff paying a percentage (such as ten percent) of the amount of the bond to these entities. The bond requirement must be kept in mind as the cost of the bond (or bailbondsperson/insurer) may be prohibitive.
Once the preliminary injunction is issued, the lawsuit continues as normal. If the plaintiff wins at the trial, the preliminary injunction usually becomes permanent. If the defendant wins, the preliminary injunction is dissolved, and the defendant can seek recovery against the bond as discussed.
If an injunction is issued and the defendant violates the injunction by, for example, continuing to sell the infringing product, the plaintiff can move the court to issue a contempt citation against the defendant. The contempt citation can provide for fines and other punitive measures. The possibility of the issuance of a contempt citation is a strong deterrent to a defendant contemplating violation of an injunction, as such conduct is a violation of a court order.
For more information, please contact A.B. Silverman, Eckert Seamans Cherin & Mellott, LLC, 600 Grant Street, 42nd Floor, Pittsburgh, Pennsylvania 15219; (412) 566-2077; fax (412) 566-6099; e-mail ARNIE@TELERAMA.LM.COM.
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