Irreparable Harm

  • No Presumption Of Irreparable Harm: “eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.” Robert Bosch (Fed. Cir. 10/12/11) (but rev’g as abuse of discretion denial of permanent injunction where parties competed, plaintiff had lost market share from the infringement, and defendant could not satisfy judgment); Nichia (Fed. Cir. 04/28/17) (aff’g denial of permanent injunction, where no meaningful competition between parties, patent owner had licensed major competitors, no past irreparable harm shown, and multiple low-cost non-infringing alternatives available on account of patent owner’s licensing policies).
  • Past Licensing Typically Argues Against Irreparable Harm But Not Always And Not Dispositive: A patent owner who licenses, but does not practice, a patented invention still may qualify for a permanent injunction. eBay (U.S. 05/15/2006) (rejecting categorical rule that past licensing bars injunctive relief: “some patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves.”); Nichia (Fed. Cir. 04/28/17) (aff’g denial of permanent injunction; “while evidence of licensing activities cannot establish a lack of irreparable harm per se, that evidence can carry weight in the irreparable-harm inquiry.”); Celgard (Fed. Cir. 08/12/15) (non-precedential) (no irreparable harm to alleged infringer’s former supplier of unpatented component used in allegedly infringing method, in part because supplier previously had impliedly licensed the infringer to use that method); Acumed (Fed. Cir. 12/30/08) (lost market share supports permanent injunction, despite patent owner’s previous licenses to two competitors: past licenses are a factor but “the identity of the past licensees, the experience in the market since the licenses were granted, and the identity of the new infringer all may affect the district court’s discretionary decision concerning whether a reasonable royalty from an infringer constitutes damages adequate to compensate for the infringement”); Apple III (Fed. Cir. 11/18/13) (past licensing does not bar permanent injunction; trial court needs to compare circumstances of prior licenses to current infringement situation); ActiveVideo (Fed. Cir. 08/24/12) (vacating permanent injunction, where companies not competitors, harm “clearly quantifiable” and patentee had actively licensed the patent, and remanding for ongoing royalty determination). Although licensing by a non-practicing patent owner weighs against preliminary injunction, a patent owner who is commercializing the invention may be irreparably harmed by infringement despite having licensed others. Abbott Labs. (Fed. Cir. 10/21/08). Just one factor for trial court to consider in its discretion. Acumed (Fed. Cir. 12/30/08) (aff’g injunction despite “close case”).
  • Irreparable Harm: “Some Causal Nexus” Between Accused Feature And The Harm is Required, Namely Infringing Feature Must Be “A” Substantial Driver Of Demand Of Accused Product: “It has been clear since at least [Apple III (Fed. Cir. 11/18/13)] that a standard of the less demanding variety—as an interpretation of ‘drive demand,’ a standard based on ‘a driver’ as opposed to ‘the driver,’ applied in the multi-consumer, multi-feature context—is the governing one for what suffices to meet the causation component of the requirement of irreparable injury, e., that the injury asserted to be irreparable be injury from the defendant’s use of infringing features. …. The standard prescribed by Apple III and Apple IV, as appropriate to the multi-purchaser, multi-component context, lies between the unduly stringent ‘sole reason’ standard we rejected in Apple III and Apple IV and the unduly lax ‘insubstantial connection’ standard we rejected in Apple II. The standards seek to reflect ‘general tort principles of causation,’ Apple III, 735 F.3d at 1361, and to make proof of causal nexus practical ‘from an evidentiary standpoint,’ Apple IV, 809 F.3d at 641, in a multi-purchaser, multi-component setting.” Genband (Fed. Cir. 07/10/17) (vacating denial of permanent injunction to a competitor because unclear if trial court applied a “the driver” standard). To show irreparable harm, one must show that the infringement caused the lost sales (or other market-based injury) and thus (typically) must show that the patented feature drives the demand for the product. Apple (Motorola) (Fed. Cir. 04/25/14) (aff’g denial of an injunction; “in order to rely on lost market share and downstream sales to show irreparable harm, Apple must provide more than evidence showing merely that Motorola is taking market share from Apple. Rather, Apple must be able to show a causal nexus between the inclusion of the allegedly infringing features in Motorola’s phones and the alleged harm to Apple.”) (2-1); see Apple IV (Fed. Cir. 12/16/15) (2-1) [modifying and replacing Apple IV (Fed. Cir. 09/17/15) (2-1)] (vacating denial of permanent injunction: causal nexus requirement is independent of the scope of the proposed injunction and “just means that there must be proof that the infringement causes the harm;” here shown by evidence of copying, Samsung’s stated beliefs in the importance of the patented features as a driver of sales, a survey and other evidence that carriers and users preferred phones with these features.) There is no irreparable harm if sales would be lost even if the offending feature were absent from the accused product. Apple I (Fed. Cir. 05/14/12) (“To show irreparable harm, it is necessary to show that the infringement caused harm in the first place. Sales lost to an infringing product cannot irreparably harm a patentee if consumers buy that product for reasons other than the patented feature. If the patented feature does not drive the demand for the product, sales would be lost even if the offending feature were absent from the accused product. Thus, a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct.”; preliminary injunction context; but noting exception where infringement will render patentee’s product obsolete). “The causal nexus requirement is not satisfied simply because removing an allegedly infringing component would leave a particular feature, application, or device less valued or inoperable.” Apple II (Fed. Cir. 10/11/12) (rev’g grant of preliminary injunction: “[where] the accused product would sell almost as well without incorporating the patented feature …., even if the competitive injury that results from selling the accused device is substantial, the harm that flows from the alleged infringement (the only harm that should count) is not.”) But, need not show that patented feature “is the one and only reason for consumer demand”; rather, “must show some connection between the patented feature and demand for Samsung’s products.” Apple III (Fed. Cir. 11/18/13) (vacating denial of permanent injunction, citing survey evidence that patented feature significantly increased price consumers would be willing to pay); Apple IV (Fed. Cir. 12/16/15) (2-1) [modifying and replacing Apple IV (Fed. Cir. 09/17/15) (2-1)] (vacating denial of permanent injunction against features of smart phone and tablet; “causal nexus” is a “flexible analysis;” showing that patented feature “is one of several features that cause consumers to make their purchasing decisions,” weighs in favor of granting an injunction even though Apple did not establish that these features were “the exclusive driver of customer demand.”). But see Broadcom (Fed. Cir. 10/07/13) (Rader, J.) (aff’g permanent injunction, distinguishing Apple I as not being a “design wins” market with limited number of customers in which design approval leads to incumbency, and as being a preliminary injunction context). See Celgard (Fed. Cir. 08/12/15) (non-precedential) (no irreparable harm to alleged infringer’s former supplier of unpatented component used in allegedly infringing method, in part because patent owner’s harm is due to infringer’s refusal to buy unpatented component from patent owner, not due to the infringement.) SeeFed. Circ. Should Clarify Irreparable Harm In Patent Cases” (Dec. 2, 2013).
  • Proof Of Lost Sales Supports Finding Of Irreparable Harm From Lost Sales: “A jury award of lost profits may support a finding of irreparable harm because it necessarily results in a finding that the patentee lost sales and would continue to lose sales in the future.” Presidio (Fed. Cir. 11/21/17) (after reversing lost profits award for failure to prove lost sales, remanding to district court to reopen discovery and evaluate whether injunction increased the patent owner’s sales, or instead a non-infringing alternative took the place of the infringer’s sales).
  • Multiple Infringed Patents May Support Irreparable Harm: “Infringement of multiple patents by a single device may strengthen a patentee’s argument for an injunction by, for example, supporting its argument that the infringed features drive consumer demand or are causing irreparable harm.” Apple (Motorola) (Fed. Cir. 04/25/14); accord Apple III (Fed. Cir. 11/18/13).
  • Potential Lost Market Share Strong Factor Supporting Irreparable Harm: While no presumption that potential loss of market share will be irreparable, “competitors change the marketplace. Years after infringement has begun, it may be impossible to restore a patentee’s … exclusive position by an award of damages and a permanent injunction. Customers may have established relationships with infringers. The market is rarely the same when a market of multiple sellers is suddenly converted to one with a single seller by legal fiat. Requiring purchasers to pay higher prices after years of paying lower prices to infringers is not a reliable business option.” Polymer Tech. (Fed. Cir. 12/23/96) (pre-eBay); Broadcom (Fed. Cir. 10/07/13) (Rader, J.) (“Broadcom lost market share as a result of Emulex’s competition — a clear measure of competition and harm.”); Presidio (Fed. Cir 12/19/12) (Rader, J.) (vacating denial of permanent injunction, even though patentee did not practice patent, where patentee and infringer products directly competed and patentee unwilling to license) (a finding that infringing sales caused patent owner to lose sales “squarely supports a finding of irreparable harm”); Merial Ltd. (Fed. Cir. 05/21/12) (aff’g permanent injunction based on likely “considerable lost market share and price erosion,” “particularly in view of evidence that Velcera’s marketing strategy was geared specifically to target Frontline Plus by touting PetArmor Plus as a cheaper but otherwise equal alternative.”); Robert Bosch (Fed. Cir. 10/12/11) (“lost market share, lost business opportunities, and price erosion” here constitute irreparable harm justifying permanent injunction); i4i (Fed. Cir. 03/10/10) (past loss of market share supports grant of permanent injunction), affirmed on other grounds (U.S. 06/09/2011); Acumed (Fed. Cir. 12/30/08) (lost market share supports permanent injunction, despite patent owner’s previous licenses to two competitors); Abbott Labs. (Fed. Cir. 10/21/08) (likely loss market share and revenues from entry of another generic supports irreparable harm and preliminary injunction).
    • But Probably Subject To Casual Nexus Requirement: Apple (Motorola) (Fed. Cir. 04/25/14) (aff’g denial of an injunction; patent owner must show that loss of market share is caused by the alleged infringement) (2-1); Apple III (Fed. Cir. 11/18/13) (“if, on remand, Apple cannot demonstrate that demand for Samsung’s products is driven by the infringing features, then Apple’s reliance on lost market share and downstream sales to demonstrate the inadequacy of damages will be substantially undermined.”)
    • But Customer’s Lost Market Share May Not Constitute Irreparable Harm: ActiveVideo (Fed. Cir. 08/24/12) (where patent owner’s customer, not patent owner, competed with infringer, the customer’s loss of market share led to decreased license fees to patent owner, which is not irreparable harm).
  • The Irreparable Harm May Be Past Harm: “Past harm to a patentee’s market share, revenues, and brand recognition is relevant for determining whether the patentee ‘has suffered an irreparable injury.’” i4i (Fed. Cir. 03/10/10), affirmed on other grounds (U.S. 06/09/2011); accord O2 Micro (Fed. Cir. 11/18/11) (non-precedential) (inadequacy of legal remedy supported by lack of defendant assets in U.S.). Litigation costs are not irreparable harm. ActiveVideo (Fed. Cir. 08/24/12).
  • Harm Pre-Dating Issuance Of Patent May Show Irreparable Harm: “consumer confusion, harm to reputation, and loss of goodwill [and price erosion] pre-dating the patent” may be relevant to showing such harm post issuance. Tinnus Enter. (Fed. Cir. 01/24/17) (aff’g preliminary injunction).
  • Irreparable Harm May Be Harm To Exclusivity And Reputation As An Innovator, Perhaps: Rev’d refusal to grant permanent injunction against lower-price competitor’s infringement, despite no evidence of loss of sales or market share, citing harm to the patent owner’s reputation for innovation, and harm to “exclusivity … an intangible asset that is part of a company’s reputation,” and loss of “some of its [product’s] distinctiveness and market lure.” Douglas Dynamics (Fed. Cir. 05/21/13) (Rader, J.) (2-1); see Apple IV (Fed. Cir. 12/16/15) (2-1) [modifying and replacing Apple IV (Fed. Cir. 09/17/15) (2-1)] (Reyna, J. concurrence) (discussing Douglas Dynamics with approval).
  • Irreparable Harm Must To Be Plaintiff: Showing irreparable harm to patent owner’s exclusive licensee is not enough. Voda (Fed. Cir. 08/18/08).