DOJ and USPTO File Statement Backing Injunctions for NPEs

The U.S. Patent and Trademark Office (USPTO) and U.S. Department of Justice (DOJ) on Friday filed a joint Statement of Interest preferencing strong injunctive relief for patent owners over courts valuing patents. The brief comes just a few months after the two agencies filed a joint statement of interest at the U.S. International Trade Commission (ITC) arguing that exclusion orders should be the presumptive remedy for infringement there.

The statement, filed in Collision Communications Inc. v. Samsung Electronics Co., et al.in the U.S. District Court for the Eastern District of Texas, recounted the recent history of injunctive relief in U.S. courts and explained that even “non-practicing patent holders, such as Collision, can suffer irreparable harm from infringement.”

In October, Samsung was ordered to pay $445.5 million to Collision following a jury verdict that Samsung willfully infringed four of Collision’s signal-processing patents. After the jury verdict, Collision filed a motion for a permanent injunction to stop any further infringement, arguing that it satisfies the four-factor test for an injunction established by eBay, including that it would suffer irreparable harm that monetary damages could not adequately compensate it for.

But Samsung opposed the motion, asserting that Collision had not established irreparable harm because “as [a] non-practicing entity [NPE], it expected to license its patent for a royalty and thus monetary relief would represent adequate compensation.”

The Statement of Interest argued that “unduly limiting patentees’ ability to seek injunctive relief to block patent infringement undermines the incentive to innovate,” according to a joint press release. “Non-practicing patentees should not be categorically denied the opportunity for injunctive relief and, under certain circumstances, such patentees can demonstrate irreparable harm and the inadequacy of monetary damages to compensate for the harm of continuing infringement,” it added.

The DOJ and USPTO laid out the reasons it can be difficult to calculate damages for patent infringement and how that difficulty can support a finding of irreparable harm. In the present case, for instance, the jury verdict awarded damages in the form of a running royalty for past infringement, and thus, “any going-forward royalty for continuing infringement…would cover a different period (the future) than was covered by the damages provided in the verdict (the past).” This makes it difficult to calculate and appropriate ongoing royalty due to the uncertainty of future market conditions.

Although the Statement noted that courts must consider other equitable considerations, such as the public interest and “balance of hardships,” it said that “[a]n appropriately scoped injunction leaves it to the parties, rather than courts, to determine the value of the technology.”

This marks the third such statement by the DOJ and USPTO. Besides the statements in this case and at the ITC, the United States also filed a similar joint statement last June in Radian Memory Systems v. Samsung. 

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