Stay Pending Appeal: Strong Likelihood of Success on Appeal Wins Stay

Muniauction v. Thompson Corp (Fed. Cir. 2007)

Thompson appealed a permanent injunction barring it from participating in municipal bond auctions over electronic networks in violation of Muniauction’s patent. The jury had found the Muniauction patent valid and willfully infringed based on a theory of joint infringement — the theory recently rejected in Paymentech.

Prior to the substance of the appeal, Thompson moved for a stay of the permanent injunction, which the court granted.

Stays Pending Appeal: Stays of injunctive relief follow the same jurisprudence regardless of whether the relief is permanent or preliminary.  The same four-factor test is also used when granting preliminary relief. The factors asses the chances of success on the merits (of the appeal) and weigh ‘hardships’ to the parties and to the public.

Four factor tests are tricky to apply — some factors may be required while others merely ‘balanced’ with various thresholds in between.  For stays, a moving party’s “strong likelihood of success on the merits” generally receives a stay of relief without regard to hardship of the parties. To win, the movant must present at least a threshold “substantial case on the merits.” In that instance, a stay would issue if coupled with proof of hardships associated with the injunction.

Here, the district court based its infringement decision on the faulty law of joint infringement — creating a high likelihood that the defendant will succeed on appeal. When the first factor is so strongly proven, a stay will always be granted.

2 thoughts on “Stay Pending Appeal: Strong Likelihood of Success on Appeal Wins Stay

  1. Lawrence, I think that we have a difference in termonology.

    Direct infringement can still be found where one party controls another’s actions. For several reasons, that agency situation is not what I would call ‘joint infringement.’ Most salient, joint infringement implies that two parties will be jointly liable — however in the director-agent situation, only the director who controls the whole infringement is liable.

  2. The CAFC in Paymentech did NOT reject the theory of joint direct infringement. The Court simply clarified the degree of “connection” required to find joint direct infringment. It required that there be a connection of “direction or control” between the separate parties engaging in the infringement.

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