U.S. Government’s Intervention in Patent Case Signals Good News for Patent Owners Seeking Injunctions

Earlier today the United States filed a Statement of Interest in Radian Memory Systems, LLC v. Samsung Electronics Co. (Civil Action No. 2:24-cv-1073), a patent infringement matter in the United States District Court for the Eastern District of Texas, Marshall Division. The filing was made by attorneys from both the U.S. Department of Justice, Antitrust Division, and the United States Patent & Trademark Office (USPTO), and suggests that the court should find the existence of irreparable harm to be in favor of the patent owner. Ultimately, the government argument boils down to this: Patent infringement in many cases causes irreparable harm to the patent owner, and monetary damages are extremely difficult to calculate and, therefore, monetary damages are insufficient.

The decision of the U.S. government to intervene with this statement in a case between a non-practicing entity and one of the world’s largest technology companies is quite telling and will be taken as extremely good news by patent owners. While the real decision to watch will be that of the district court, and then the Federal Circuit, it seems clear that the Trump Administration is advocating a new path forward and a return to the possibility of an injunction issuing to patent owners—even a preliminary injunction. And with the DOJ and USPTO intervening in this case so early, whatever the ruling, the case seems destined for the Supreme Court.

Radian’s Preliminary Injunction Request

In this case, Radian filed a complaint for patent infringement against Samsung. In seeking a preliminary injunction, Radian alleges that it developed and patented an innovative technology to improve management of flash solid-state drives (SSDs), particular for use in enterprise and data-center operations. Radian alleges it was pressured into joining the NVM Express (NVMe), which was the relevant standard setting organization. Radian refused because membership would have required Radian to offer a royalty-free license of its patented technology to NVMe members. Following Radian’s decision not to join and freely give its patented technology to Samsung, Radian alleges NVMe members, including Samsung, began infringing.

In the preliminary injunction request, Radian argued it will continue to suffer irreparable harm in the form of both lost market opportunity and market position as a technology pioneer. Samsung countered that Radian failed to show irreparable harm, specifically arguing that Radian, a non-practicing entity, only ever expects a royalty and thus monetary relief will provide full compensation.

Government: Reasonable Royalty Doesn’t Cut It

According to the U.S. government, “[A] valid patent is inherently a unique asset… And a valid patent has attributes both of personal property and of a public franchise, with the rights (like the right to an injunction) that the statute prescribes.”

The U.S. filing continues:

“The loss of control over a unique asset is relevant to the patent infringement context too, as infringement deprives the patent holder of the ability to control to whom it licenses its products and the terms of that licensing. For example, patent owners who rely on licensing as part of their commercialization strategy often desire to control the scope of a license. This includes licensing only for certain claims, competitors, markets, fields of use, geographies, or time frames. These elements of control are valuable because a license grant provides explicit authority from the patent owner to make, have made, use, sell, and/or offer for sale the invention. Without the license, any of these activities would infringe the patent(s). Patentees may also desire specific terms such as arbitration provisions for breaches of the license, auditing of a licensee’s sales, or royalty payments in a running royalty, lump sum, or a combination. Even when the patentee desires to license its patent to the defendant, a court-imposed reasonable royalty lessens the patentee’s ability to control the scope and terms of its license.”

The filing then continues, “[i]n cases of unique assets, courts have commonly found irreparable harm when damages are difficult to calculate.” The government cites, in part, to the large number of damages verdicts that have been reversed by the Federal Circuit as evidence of the uniquely difficult task of properly valuing patents. Furthermore, since eBay, the Federal Circuit has recognized that difficulty in calculating monetary damages for ongoing patent infringement is evidence of irreparable harm (citing to i4i). And the Federal Circuit has held that a patent owner may suffer irreparable harm even if they do not themselves practice the claimed invention (citing Broadcom).

Injunctions Help Deter Infringement

In addition to the prospect of an injunction giving patent owners important protections on how and to whom a license to their patented technology is given, the government argues that an injunction also helps prevent potential licensees from viewing infringement as economically efficient—which has become better known as efficient infringement (i.e., the rational business decision to infringe because there is no real chance an injunction will issue and little realistic chance the patent owner will ultimately prevail with any meaningful damages).

The government filing concludes by admitting that irreparable harm is but one of the injunction factors, but that it believes the “Court should consider Radian’s evidence of a likelihood of irreparable harm, including any evidence that monetary damages are difficult to calculate.”

Image Source: Deposit Photos
Author: Devon
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