The key litigated issue in Douglas Dynamics, LLC v. Buyers Products Co. was whether the lower court properly denied the plaintiff's request for injunctive relief in this patent infringement action in light of the irreparable harm standard set out in eBay Inc. v. MercExchange, L.L.C.

The plaintiff Douglas Dynamics, LLC manufactures snowplow assemblies to mount on trucks. Douglas sued its competitor, Buyer Products Co., for infringement of several patents related to snowplow mounting assemblies. Following a jury verdict that found US Patent No. 5,353,530 ('530 patent) and US Patent No. 6,944,978 ('978 patent) valid and infringed, the US District Court for the Western District of Wisconsin denied Douglas a permanent injunction and assigned an ongoing royalty.

In denying Douglas a permanent injunction, the district court concluded that Douglas failed to make a threshold showing of irreparable harm. The district court credited evidence that customers willing to pay a premium for a Douglas snowplow were unlikely to purchase a less expensive Buyers model instead and that Douglas's market share increased about 1% a year after Buyers introduced its infringing models. The district court further noted that although the parties competed for sales, Douglas suffered no injury because it failed to show that it was losing either:

Douglas appealed this denial and the royalty, as well as the district court's claim construction relating to a separate patent, US Patent No. Re. 35,700 ('700 patent), to the US Court of Appeals for the Federal Circuit.

In its May 21, 2013 split opinion, the Federal Circuit reversed and remanded the district court's denial of a permanent injunction to Douglas. The Federal Circuit also reversed the district court's claim construction of the '700 patent in favor of Douglas, vacated the district court's ongoing royalty rate for the '530 and '978 patents, and remanded the matter to the district court to establish a new pre-injunction ongoing royalty rate consistent with its opinion. While the '978 patent remains in force, the '530 patent has expired and the Federal Circuit explained that any permanent injunction as to the '530 was moot and the ongoing royalty ceases to apply after the patent's date of expiration.

Explaining its reversal as to the permanent injunction, the Federal Circuit stated that the district court erred in determining that Douglas did not suffer irreparable harm because:

On the issue of the reasonable royalty for the '978 patent, the Federal Circuit vacated and remanded because the district court:

In Judge Mayer's dissent, he argued that Douglas failed to meet the prerequisites for injunctive relief under eBay and characterized the majority as presuming irreparable harm. In particular, he felt the district court correctly denied a permanent injunction because Douglas failed to demonstrate that money damages would be inadequate to compensate for the sale of Buyers' remaining plows.

Parties to patent infringement disputes should note the court's acknowledgment that different types of harms may allow for a finding of irreparable harm. Even where a patent owner seeking an injunction may be unable to show loss of market share or sales, the patent owner may still be able to obtain injunctive relief, for example, if the parties are competitors, the infringer gains market share, and the patentee suffers erosion of reputation or brand distinctiveness.