Friday, September 27, 2019

Injunction Bonds and Wrongfully Issued Injunctions

Law360 published a story this week titled NJ Track Clears Hurdle In Long-Shot Bid For Betting Revenue, discussing the Third Circuit's recent decision that the New Jersey Thoroughbred Horsemen's Trade Association (NJTHTA) had been wrongly enjoined from offering sports betting, and was entitled to recover up to the amount of the injunction bond the NCAA and four professional sports leagues had posted--which, however, amounts to only $3.4 million, much less than the $150 million NJTHTA alleges it suffered as a result of the wrongly-issued injunction.  The case had nothing to with patents or other IP law, but it does call to mind the (arguable) oddity of the U.S. practice of not allowing a wrongly enjoined defendant from recovering the full extent of its damages, beyond the amount of the injunction bond.  This is something I blogged about back in 2014 (see here), where I noted that in other countries wrongly enjoined defendants in patent (and other) cases can recover beyond the amount of the bond, when necessary, and cited a law review article questioning the merits of the U.S. rule.  The Law360 article cites some other commentators suggesting that (though it's a longshot) there might be a basis for recovering above the amount of the bond if the parties seeking an injunction acted in bad faith, so it will be interesting to see what happens on remand.  Perhaps this is an area of U.S. law that needs to be reformed.

Further to this point, however, I should note that the Court of Justice for the European Union recently issued a judgment in Case C-688/17, which appears to take a restrictive view of compensation for a wrongly issued preliminary injunction in patent litigation.  There are write-ups on IPKat and Kluwer.  I haven't yet read the judgment myself--should I wait until an English version comes out, or read the French or German version now?--but will come back with something, I hope in the next week or so, after I have.

1 comment:

  1. It would seem in conflict with Articles 48(1) and 50(7) of the TRIPS Agreement - though I think that kind of argument does not achieve much traction in the US.