The case is Socket Solutions, LLC v. Import Global, LLC, a short precedential opinion by Chief Judge Moore (joined by Judge Prost and District Judge Seeborg) handed down last Tuesday. Plaintiff Socket Solution “owns U.S. Patent No. 9,509,080, which is directed to an indoor electrical
wall outlet cover that permits use of a wall outlet while concealing the outlet contact openings” (p.2). “Socket Solutions sued Import Global, alleging Import Global’s Neat Socket product infringed claim 19 of the ’080 patent, and moved for a preliminary injunction” (id.). The district court granted the preliminary injunction, but the Federal Circuit reverses and remands. In particular, the appellate court concludes that the district judge erred in construing two terms (“backplate” and “pin”) used in claim 19, and therefore vacates and remands for further consideration on the issue of “likelihood of success on the merits” (pp. 5-9). Of greater interest, however, to the law of remedies, is the appellate panel’s discussion of irreparable harm:
Because we remand to the district court on the likelihood of success factor, we do not reach Import Global’s irreparable harm arguments. We hold only that the court erred to the extent it relied on a presumption of irreparable harm when a clear showing of patent validity and infringement has been made. . . . We note that this presumption cannot be justified after eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393–94 (2006).
In eBay, the Supreme Court reversed a grant of permanent injunction where the appeals court applied a “general rule” unique to patent disputes “that a permanent injunction will issue once infringement and validity have been adjudged.” 547 U.S. at 393–94 (citation omitted). The Supreme Court explained that patent disputes are no different than in other cases governed by the “traditional principles of equity,” and thus the traditional four-factor framework should apply. Id. After eBay, we confirmed the presumption of irreparable harm was abolished as it applied to determining injunctive relief. Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1149 (Fed. Cir. 2011) (“We take this opportunity to put the question to rest and confirm that eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.”). Although eBay and Bosch involved permanent injunctions, we see no reason to depart from their holdings in the preliminary injunction context.
It is not clear here that the district court applied the presumption of irreparable harm to its fact findings rather than simply note there is such a presumption. . . . In any event, the court may analyze irreparable harm in a manner that does not rely on the presumption, if it reaches this issue on remand (pp. 9-10).
By itself, the above discussion is pretty unremarkable, inasmuch as it merely reaffirms the Federal Circuit’s long-standing understanding of eBay, albeit in the context of preliminary relief. The absence of a presumption of irreparable harm nevertheless remains a fraught issue, with Collision Communications having argued (unsuccessfully) before Judge Gilstrap, and more recently before the Federal Circuit (where the matter remains pending), that it is entitled to such a presumption because that would have been the practice in courts of equity in 1789, and under Trump v. CASA federal courts are obligated to apply the law of equity as it would have been understood as of that time. For previous discussion on this blog of Collision Communications v. Samsung, see here; for recent discussion of the pending appeal, see the write-up last week on Patently-O, here. My own long-standing view is that, while the eBay opinion is not a paragon of legal reasoning, the eBay standard remains a necessary tool, at least in U.S. practice, for reducing the harms resulting from patent holdup. I also wonder whether, doctrinally, even if U.S. courts are obligated to apply the standards that a court of equity would have applied in 1789 (sigh), if a district court today can award post-judgment reasonable royalties but could not have done so in 1789 absent proof of an established royalty, that should render the presumption of irreparable harm nugatory--or does that argument only work if ongoing royalties are characterized, contrary to current Federal Circuit case law, as a form of legal relief authorized under 35 U.S.C. § 284? See pp. 1162-63 of this paper; cf. Plaintiff’s Brief at p.53, citing an 1887 Supreme Court decision (McConihay v. Wright) for the proposition that “The adequate remedy at law, which is the test of equitable jurisdiction in [federal] courts, is that which existed when the judiciary act of 1789 was adopted, unless subsequently changed by act of congress”).
