Federal Circuit Loosens Patent Infringement Permanent Injunction Standard

Practical Law Legal Update 2-549-3864 (Approx. 4 pages)

Federal Circuit Loosens Patent Infringement Permanent Injunction Standard

by Practical Law Intellectual Property & Technology

Background

On April 15, 2011, Apple sued Samsung in the US District Court for the Northern District of California for infringement of several of Apple's patents and dilution of Apple's iPhone trade dress. On August 24, 2012, a jury found that 26 Samsung products infringed Apple's patents and that six Samsung smartphones diluted Apple's trade dress.

After trial, Apple moved to permanently enjoin Samsung from infringing six of its patents, including three utility patents directed to the bounce-back, multi-touch display and double-tap-to-zoom features on its smartphones and tablets. The district court denied Apple's request for a permanent injunction and Apple appealed.

Outcome

On appeal, the Federal Circuit:

Reversed the district court's denial of permanent injunctive relief on the utility patents because the district court abused its discretion in its analysis of the irreparable harm prong.
Affirmed the district court's denial of injunctive relief on Apple's design patents and trade dress.

To succeed on a request for a permanent injunction, a patentee must show that:

It has suffered irreparable harm.
It has no adequate remedy at law to compensate it for the harm.
The balance of hardships to the parties warrants an injunction.
The public interest would not be disserved by an injunction.

The Federal Circuit clarified the requirements for showing the irreparable harm factor and held that:

When showing causal nexus, a patentee must show that there is some connection between the patented feature and the demand for the infringing product, but does not need to show that the patented feature is the only reason for the demand.
Where there are multiple patents, irreparable harm does not need to be shown on a patent-by-patent basis and can instead be shown by analyzing groups of patents.

While this decision addressed permanent injunctions, the Federal Circuit previously addressed the preliminary injunction standard in two earlier cases involving the same parties and many of the same patents. For more information on the Federal Circuit's earlier decision on preliminary injunctions, see Legal Update, Federal Circuit Reverses Preliminary Injunction Against Samsung Galaxy Nexus Smartphones.

Causal Nexus

The Federal Circuit first confirmed that showing irreparable harm requires a showing of some causal nexus. The court then clarified that when showing causal nexus, the patentee should not be required to show that the patented feature is the only reason for consumer demand for the infringing product because:

This showing would be inconsistent with the complex nature of consumer preferences and the flexibility in principles of equity.
A rigid standard could mean that injunctive relief would never be available in cases involving multi-function products, a result that would contradict eBay Inc. v. MercExchange, L.L.C., which held that traditional equitable principles should be used when analyzing the four-factor test for permanent injunctions.

The Federal Circuit held that a patentee can meet the causal nexus requirement by showing some connection between the patented features and consumer demand for the product. The court explained that there are several ways that this showing could be made, for example, with evidence that:

A patented feature is one of several features that cause purchasers to make their purchasing decisions.
The inclusion of a patented feature makes a product significantly more desirable.
The absence of a patented feature would make a product significantly less desirable.

Using Multiple Patents to Show Irreparable Harm

The Federal Circuit next clarified that it is not necessary to analyze irreparable harm on a patent-by-patent basis. The court held that there may be circumstances where it is logical and equitable to analyze irreparable harm based on a group of patents, for example where:

The patents all relate to the same technology.
The patents combine to make a product significantly more valuable.

The Federal Circuit left it to the district court to determine whether Apple's patents could be combined to show irreparable harm on remand.

Practical Implications

The Federal Circuit criticized the district court for being too strict in its application of the standard for permanent injunctions and used Apple Inc. v. Samsung Elecs. Co. to loosen the requirements for showing irreparable harm. While district courts may be more cautious in their application of the permanent injunction standard, the Federal Circuit's less stringent requirements will likely be most helpful for cases relating to products that have many components, like those in the electronics industry.

Federal Circuit Loosens Patent Infringement Permanent Injunction Standard | Practical Law