By now, the reader must have heard of the famous – or infamous, depending on viewpoint – Supreme Court decision in eBay. (eBay, Inc. v. MercExchange, LLC, 547 U.S. 338). For those few too embarrassed to admit their ignorance, a brief summary: the heretofore virtually automatic grant of a permanent injunction to a prevailing patentee is ended; henceforth, grant of such injunctions is subject to “the traditional four factor test that courts sitting in equity have used for centuries to determine the appropriateness of injunctive relief.” In practical terms, this meant that nonpracticing patentees (the dreaded and much maligned “NPE”) could not get an injunction. Did the reverse hold true, i.e. that practicing entities WOULD automatically get an injunction? Rather than keep the reader in suspense, the answer is NO.
In a recent case, Bard Peripheral Vascular, Inc. et al. v. W.L. Gore & Associates, Inc., a jury in the U.S. District Court for the District of Arizona found that the defendants had willfully infringed the plaintiff’s patent on an improved stent (given the plaintiff’s name, it should come as no surprise that a stent is a device used in vascular surgery). The plaintiff produced and sold the patented stents and, indeed, had a 28% share of the market. It had the capacity to supply the needs of the entire market.
The jury had awarded the patentee its lost profits, meaning, in effect, that it had found that the products of the patentee and the infringer were equivalent. The defendant, which had a 62% market share (who says crime doesn’t pay), nevertheless introduced evidence that, in many applications, its product was superior to that of the patentee. The court (meaning the judge) ruled that the jury’s finding of equivalence was “hypothetical” and that, as a “practical” matter, the grant of an injunction would be detrimental to “the greater public good.” He therefore denied the patentee a permanent injunction, but issued a compulsory license to the defendant.
THE LESSON TO BE LEARNED: Even practicing patentees are not entitled to an automatic injunction. Consider the public good. When requesting a permanent injunction, it may be wise to request, in the alternative, a compulsory license.