Posts Tagged: "permanent injunctions"

On January 5, 2017, the District of Delaware issued its long-awaited decision in the patent dispute pending between Amgen and Regeneron wherein the Court granted Amgen’s request for a permanent injunction against Regeneron’s new PCSK9-inhibitor cholesterol drug. Both Amgen and Regeneron each independently spent billions of dollars over the past decade-plus developing a new class of cholesterol drug. The drug itself comprises an antibody that binds to PCSK9 proteins… Whereas Regeneron managed to be the first to market, Amgen succeeded in getting to the Patent Office first. Amgen originally sued Regeneron, along with Sanofi, its European partner, in October 2014. Amgen asserted three patents directed to antibodies that bind to PCSK9. Over the next month, Amgen commenced additional lawsuits as new patents issued from the Patent Office. The cases were eventually consolidated, but Amgen eventually went to trial against Regeneron on only two of the originally asserted patents.

Every time a new patent reform bill moves forward in Congress, the courts create case law eliminating the need to pass the bill. They legislate from the bench to protect their turf. The infringer lobby took advantage of this dynamic and pushed bills that would stimulate response from the courts… I think we should employ this well proven method of changing law. I know this is not how our government is supposed to work, but let’s be pragmatic. We cannot force an unwilling government to follow its own constitutional processes. So, we need to work with what is available.

Tile Tech argued that a default judgment was not appropriate because the district court did not find that Tile Tech acted in bad faith. However, the Court identified the full test for default, in the Ninth Circuit, as “willfulness, bad faith, or fault.” Tile Tech failed to present evidence that its dilatory actions were not its fault, i.e. outside of its attorney’s control. Therefore, the Court upheld the judgment… The Court also found the requirement to surrender “any mold, or other device, by which any [component] utilized with the [patent] was made” an acceptable means of preventing future infringement.

A lack of written opinion in the Rule 36 affirmance issued by Federal Circuit wasn’t an issue for PCT’s counsel. “These types of results reflect a wholesale rejection of the laundry list of appellate issues Holland had attempted to raise,” Laurus noted. “Prompt resolution of this is better than some lengthy opinion that might issue months down the road.”

In PCT International, Inc. v. Holland Electronics, LLC, the use of a Rule 36 judgment is particularly disconcerting because the Federal Circuit upheld the issuance of a permanent injunction by the district court. Since the Supreme Court’s decision in eBay v. MercExchange over a decade ago it has become increasingly difficult, indeed at times impossible, for victorious patent owners to enjoy exclusive rights once they have prevailed in a patent infringement litigation. Issuing a Rule 36 judgment where the patent owner was victorious and a permanent injunction stands robs the patent owner community of vital Federal Circuit precedent that could otherwise be used to inform district courts on the appropriateness of this extraordinarily important remedy.

Over the last ten years, one bad patent reform bill after another has been introduced and then pushed by a fantastic lobbying and public relations effort that has dumped hundreds of millions of dollars on Washington DC. eBay v. MercExchange is not the only legislation enacted by the courts in their effort to avoid Congressional meddling with their turf. Legislation was introduced related to damages, willful infringement, inequitable conduct and obviousness, all of which were enacted in whole or in part by the courts, presumably to avoid passage of the legislation in Congress.

While we tend to think of Las Vegas’ tourism-based economy as built on gambling, trade shows also bring hundreds of thousands of visitors to the city each year. Thus, the issue of effective enforcement of the patent laws at these trade shows becomes entwined with the health of the city’s economy. Against this backdrop, the Las Vegas bench of the U.S. District Court for Nevada has developed a muscular set of equitable remedies for U.S. patent holders who complain to the court of patent infringement by a trade show exhibitor, remedies that the court can and does deploy with sufficient speed to be effective within the narrow timeframe of a trade show.

So it now looks like this: if you are a patent owner and feel that your rights have been encroached upon, you now have to assume there will be a challenge to their validity by a potential licensee through an Inter Partes Review (IPR). If you are one of the lucky few (~25%) who survive such a challenge with at least one valid patent claim, you then have to expect an appeal. Assuming you win that appeal, then the real court battle starts in earnest and you’ll have to face what has now become a $3-5M ordeal in legal fees to get through a full trial on the merits and the routinely filed appeal should you beat all odds and win. Treble damages for willful infringement have been rarer than a dodo bird sighting and even winning does not mean you will collect your money any time soon, as the Apple-Samsung saga has recently shown.

Consumers benefit most when patents are strongest and act to block actors. When competitors are blocked that means they cannot simply copy and flood the market with knock-offs or products that at their core are essentially identical. Competitors that are blocked by strong patents have a choice. Either they ignore the patent rights and infringe, which is sometimes the choice made particularly when a small company or individual owns the patent and it is believed they can be bullied. Alternatively, competitors must figure out how to design around the patents in place and find new, creative ways to do what they want to do. When patents are designed around that is when paradigm shifting innovation can and does happen. Unfortunately, thanks to the Supreme Court and Congress we have a patent system that today incentivizes copycats and bullying of innovators.

Simply stated, Lemley is wrong and his suggestion that eBay v. MercExhange is at all positive, let alone the best development, strikes me as utterly ridiculous. The true mischief of the eBay decision isn’t that patent owners can’t obtain a permanent injunction, but rather that the Supreme Court has taken the threat of a permanent injunction off the table. This means that infringers have no incentive to deal. If infringers had to fear the possibility of a permanent injunction they would be forced to enter into meaningful arms length negotiations with patent owners. Instead, now infringers can merely say “sue me,” which is exactly what they do.