Monday, February 27, 2023

Jarosz, Contreras & Vigil on Preliminary Injunctins; Contreras on SEPs

John C. Jarosz, Jorge L. Contreras, and Robert I. Vigil have published Preliminary Injunctive Relief in Patent Cases: Repairing Irreparable Harm, 31 Tex. Intell. Prop. L.J. 63 (2022).  Here is a link to the paper, and here is the abstract:

            Unlike a permanent injunction, which is an equitable remedy awarded to an injured party, a preliminary injunction is a form of interlocutory relief that is imposed by a court to preserve the status quo during litigation. In patent cases decided since (and often before) the Supreme Court’s 2006 decision in eBay v. MercExchange, courts have applied a four-factor test when considering the issuance of a permanent injunction. A similar test has evolved for preliminary injunctions, following the Court’s decision in Winter v. NRDC. Both the eBay and Winter tests rely heavily on whether the patentee is likely to suffer “irreparable” harm if an injunction is not granted. Yet despite the very different statutory bases and underlying reasoning for preliminary versus permanent injunctions, almost no scholarly attention or judicial reasoning has been devoted to an analysis of the meaning of irreparable harm in the context of preliminary injunctions. In order to gain a better understanding of the information that courts consider when deciding motions for preliminary injunctions, we collected data from 211 published district court opinions in patent cases decided between 2013 and 2020 in which a preliminary injunction was sought. Based on our research, as well as recent opinions of the Federal Circuit, we find that much of the uncertainty and lack of clarity surrounding preliminary injunctive relief can be reduced, or eliminated, by explicit recognition that irreparable harm has (or should have) a certain meaning, and that meaning is not the same as harm. We propose a new four-factor test for irreparable harm when assessing the issuance of preliminary injunctions in patent cases. That test provides that to be considered irreparable, harm should be that which, in the absence of an injunction, 1) would unduly disrupt the status quo, 2) is imminent and likely to occur, 3) is causally linked to the alleged infringement, and 4) is unlikely to result in payment of adequate compensation. We believe that the application of this new test will make the preliminary injunction analysis more certain, economically sensible, and better fitted to achieve its stated statutory goals.

I mentioned an earlier draft here.  Very interesting paper, which I will be sure to cite in my own future work.

Professor Contreras also recently posted on ssrn a paper titled A Research Agenda for Standards-Essential Patents, which is forthcoming in A Research Agenda for Patent Law (Enrico Bonadio & Noam Shetov eds., Edward Elgar 2024).  Here is the abstract:


            This Chapter discusses the current state of legal, economic and policy research on standards-essential patents (SEPs) and fair, reasonable and nondiscriminatory (FRAND) licensing of SEPs, and recommends additional research directions for the future. Areas for future research include the investigation of market adoption of standardized products subject to FRAND licensing and available on a royalty-free basis, measurement of various characteristics of SEPs including disclosure, validity, essentiality and transfer, the evolution of SDO and consortia patent policies, SEP licensing behavior, both by SEP holders and product manufacturers, SEP and FRAND disputes and litigation, including arbitration, competition among patent pools for standards, and the political economy of SEP policy making.

Thursday, February 23, 2023

Allegations of Wrongful Patent Assertion in the U.S. and South Africa

One of my current projects is a book-length treatment of wrongful patent assertion, the manuscript of which I hope to submit by June 30, 2025.  In this regard, I'm particularly interested in these two recent decisions. 

First, on Friday of last week, the U.S. Court of Appeals for the Federal Circuit issued its decision in Lite-Netics, LLC v. Nu Tsai Capital LLC, dba Holiday Brights Lights (opinion by Judge Taranto, joined by Judges Lourie and Stark).  The case involves an action brought by Lite-Netics alleging infringement of two patents relating to light-fixture assemblies (e.g., for holiday lights held in place by magnets).  The defendant, a competitor, filed various state-law counterclaims, alleging that Lite-Netics engaged, inter alia, in unfair competition, tortious interference with prospective business advantage, and defamation, by informing customers that Holiday’s products infringe these patents, and that the customers themselves could be liable for infringement.  In addition, it filed a motion for a preliminary injunction.  The district court granted the motion, forbidding Lite-Netics “from making statements . . . suggesting ‘copying’ by HBL, suggesting HBL customers will be burdened as additional defendants in this or any lawsuit, or suggesting that HBL is a patent infringer” (pp. 8-9).  In particular, the court found that HBL was likely to succeed on the merits of its tortious interference and defamation claims, notwithstanding Federal Circuit precedent that requires a person asserting such claims based on allegedly false statements about patent infringement to prove that the statements are both objectively baseless and made in subjective bad faith. The Federal Circuit reverses, concluding that at this stage of the litigation—before claim construction, etc."the district court abused its discretion at least in finding that Lite-Netic's infringement allegations with respect to the '779 patent are objectively baseless" (p.14).  (The court does not address the other patent in suit or other issues, see id. & n.2.) 

The case has already been discussed at some length on both Patently-O and IP Watchdog, so I won’t go into further detail here, except to note that, as others have previously observed, requiring proof of objective baselessness and subjective bad faith imposes what is often an insurmountable obstacle to the successful assertion of business-tort claims premised on allegations of wrongful patent enforcement.  Although the Federal Circuit could be right that these requirements, derived in part from the Supreme Court’s Noerr-Pennington antitrust/First Amendment case law and in part from other case law on patent preemption, are constitutionally necessary in the present context, they do go beyond the comparatively narrow privileges that the common law recognized for falsely accusing a competitor of infringement--and also can make the successful assertion of anti-patent troll statutes, which many states have enacted in the past decade, very difficult as well.  

As for South Africa, I’d like to note Chijoke Okorie’s post on IPKat, titled Common law doctrines and patent infringement in South Africa:  Villa Corp Protection (Pty) v Bayer Intellectual Property GmbH.  The post discusses, and links to, a recent 6-3 decision of South Africa’s Constitutional Court, which appears to allow the defendant to proceed with two related defenses that seem to resemble the U.S. doctrine of inequitable conduct.  The first is based on § 61(1)(g) of the Patents Act, under which “a false statement or representation which is material and which the patentee knew to be false at the time when the declaration was made” can be a ground for invalidating an issued patent.  The second is based on the common-law doctrine of unclean hands.  In the case under consideration, Bayer allegedly made statements to the South African Patent Office concerning the novelty of its claimed plant protection product, which contradict its seeking of an SPC from the EPO concerning the same product.  The decision also cautions, however, that it may be rare for unclean hands to amount to an abuse of process resulting in unenforceability.  How significant this may be remains to be seen, if § 61(1)(g) provides an independent ground for invalidating an issued patent; but maybe it’s possible for one to apply and not the other, and in any event (as the majority notes) litigants often make redundant claims. 

Tuesday, February 21, 2023

OxFirst Webinar on Injunctions and SEPs

OxFirst will be putting on a free webinar on Monday, February 27 at 15:30 GMT titled "Are Injunctions at the ITC and district court within reach for SEPs?"  Here is OxFirst's description:


In this webinar, US antitrust and patent litigators provide insight into the current enforcement climate in the US for those seeking to obtain injunctions based on infringement of standard essential patents.  The intersection of IP and competition law in this area has been a flashpoint in recent years, particularly in the US, and requires a comprehensive understanding of numerous, and often varying, legal precedents and policies (both public and private).  The panelists will discuss how the relevant considerations for asserting standard essential patents at the US International Trade Commission (USITC) have developed over the years, especially in light of the interplay between the USITC and US competition authorities.  The panelists will also provide an update on the US competition law implications of seeking and obtaining injunctive relief in the standard essential patent context, drawing on recent changes in competition authority policies and approaches. 

Registration is available here.

Also of possible interest to readers of this blog is USC Gould's upcoming 2023 Intellectual Property Institute (Mar. 20-21).  The March 20 session will include panels on "Apportionment in Patent Damages," "Use of Licenses and Other Tools to Estimate a Reasonable Royalty  For information," and "Proving and Arguing Monetary Remedies in Copyright, Trade Secret and Trademark Disputes." see here.