Federal-circuit-ism: Defining the relationship between the Federal Circuit and its Regional Sister Courts

By Dennis Crouch

Revision Military, Inc. v. Balboa Manufacturing Co. (Fed. Cir. 2012)

In the US, federalism is the term that we generally use to highlight the complex relationship between state governments and the federal government. In patent litigation we might use the expanded term federal-circuit-ism to describe the Federal Circuit's relationship with both state courts and the regional circuit courts of appeal. Here, the Federal Circuit applied its principles of federal-circuit-ism to hold that preliminary injunctions in patent cases are patent specific and therefore require application of Federal Circuit law rather than the law of the relevant regional circuit court of appeal.

The Case: Revision's design patents are directed toward protective eyewear for hunting and other gun sports. Patent Nos. D. 537,098 and D. 620,039. Revision sued Balboa and requested a preliminary injunction to stop the ongoing alleged infringement. After a hearing, the district court sided with Balboa โ€“ holding that Revision had not provided a "clear and substantial" likelihood of success on the merits as required under the Second Circuit law of preliminary injunctive relief. The Federal Circuit has an easier standard for approving preliminary relief in patent cases โ€“ requiring only a preponderance of the evidence โ€“ and the lower court erred in not applying that standard.

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The district court found that the patentee's infringement case lacked sufficient merit to meet the "clear and substantial" standard. On remand, the lower court will be asked to decide whether it meets the Federal Circuit's lower standard.

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While the appellate court does a fine job of criticizing the district court judgment, one interesting optical mote in Judge Newman's written opinion is that it fails to mention the leading Supreme Court case on injunctive relief, eBay v. MercExchange. That case is important here. A major element of eBay is the Supreme Court's suggestion that the law of injunctive relief in patent cases should be the same law that is applied in other areas of law.

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. . . . These familiar principles apply with equal force to disputes arising under the Patent Act. As this Court has long recognized, "a major departure from the long tradition of equity practice should not be lightly implied." Nothing in the Patent Act indicates that Congress intended such a departure.

Federal Circuit precedent on applying its own law to preliminary injunction standards reaches back at least to Hybritech Inc. v. Abbott Labs., 849 F.2d 1446 (Fed. Cir. 1988). In that case, the Federal Circuit held that its own law (rather than that of a regional circuit) controls the grant or denial preliminary injunctions. In my view, eBay places this notion in serious question.

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The second half of the opinion looks at the methodology for judging infringement. Here, the appellate court criticized the lower court's decision for unduly focusing on individual elements that "stand out as dissimilar" rather than how those differences would impact an ordinary observer considering the design as a whole and its similarity to the accused device and with reference to the closest prior art.

18 thoughts on “Federal-circuit-ism: Defining the relationship between the Federal Circuit and its Regional Sister Courts

  1. The court did cite Winter, which is SCOTUS most recent restatement of eBay and said go forth and follow Winter.

  2. anon, it seems to me that if eBay can be applied to preliminary injunctions, and I think it should, the decision calls for the general principles of equity to be applied. I don’t see how this justifies the Federal Circuit to adopt different and unique principles that are different from the other circuits.

    Obviously, in answering the question of infringement or validity, the law applied still has to be Federal Circuit law. Is that your point?

  3. It seems completely illogical to me that the test for granting or upholding a preliminary (pre-trial, and often pre-discovery) injuction could possibly have a lower standard than the basic, traditonal, standard the Sup. Ct. set in eBay for a perminant injunction after a full trial in which a defendant has had a full opportunity to fully present all possible defenses, and lost. But I have yet to see a Fed. Cir. decision on a preliminary injunction that says that? Some decisions have not even cited eBay, and not even discussed what should be an appropriate posted bond?

  4. Given the zillions of goggles already designed and disclosed over the last century or so, the squared off edges on the goggles to the right should end any infringement analysis.

    Why is this difficult for people?

    Oh right: lawyers.

    When is Newman going to retire anyway? She stinks.

  5. it’s unlikely that any harm would actually be irreparable.

    I’ve been saying that for some time now. Sure, it’s easy to think of fact scenarios where the harm would be irreparable, but they’re not common in practice, outside the pharmaceutical space.

  6. Seems to my layman mind that preliminary injunctions should be rare in patent cases anyway, since it’s unlikely that any harm would actually be irreparable.

  7. Thanks Peter. Let us hope that the Fed. Cir. pays better attention to clairification of both what is 103 prior art and who is the 103 POSITA for design patents in the appeal of the big Apple v. Samsung trial decision.
    [There has also been criticism by at least one academic of the jury instructions alegedly ignoring functionality.]

  8. You keep ascribing “difficulties” to me IANAE when none are apparent.

    “You keep saying I have no self-awareness, but I’m just not seeing it.”

    The point of distinction here is that eBay’s “treat injunctions like anything else” just does not play into whether or not the rule of established law was properly applied.

    “The point of whether they used the right law just does not play into whether or not the law was properly applied.”

    You truly are a joy to read, anon. I’m glad you’re still the most prolific “author” around here, even with all the sockpuppets gone. Except for AI, but I suppose that can’t be helped. Always two there are.

  9. Paul, the requirement for a “Rosen reference” to find a design patent obvious often (IMHO) gets in the way when one tries to apply “regular” 103 concepts to design patents, notwithstanding what 35USC171 and KSR say. I personally believe KSR implicitly overruled or substantially weakened the import of Rosen, but the recent Fed. Cir. decision in one of the Samsung/Apple appeals blew a great chance to address that topic.

  10. Still having a spot of bother with the ol’ second language, anon?

    Not at all.

    You keep ascribing “difficulties” to me IANAE when none are apparent.

    The point of distinction here is that eBay’s “treat injunctions like anything else” just does not play into whether or not the rule of established law was properly applied.

    The 2nd circuit did not apply the correct rule of law – this has less to do with “injunction” (and note that I too set the permanent versus preliminary aspect aside), and more to do with established law between a particular circuit and the Federal Circuit directly on a federal question.

    A better case is needed to be made to say that eBay directs the 2nd circuit’s rule of law to be more appropriate than the Federal Circuit’s rule of law.

  11. In eBay, the court began its analysis with a consideration of whether the test for injunctive relief for patent infringement should be treated differently than it is treated in other areas of law. The court concluded that it should be treated according to the general principles of equity and that there is not a patent specific rule that departs from those general principles.

    This suggests to me that the court is now wrong in concluding that the law of injunctive relief in patent cases is patent law specific and requires the Federal Circuit to apply its own law rather than the default rule of following the law of the relevant regional circuit.

    Now, we could have a rational system where the Federal Circuit follows own law on every federal legal issue, regardless of whether or not it is a patent case. The court has not chosen that approach and instead only purports to create its own law in patent cases when the issue on appeal is a patent specific issue.

    Here, I am also setting aside the permanent vs preliminary relief differences. These could potentially be important because eBay focused on permanent relief while this case is about preliminary relief. However, many courts have applied eBay in the preliminary injunction context.

  12. Perhaps you can give a reason why the decision factors into the particular question being resolved.

    Still having a spot of bother with the ol’ second language, anon?

    From the above: “A major element of eBay is the Supreme Court’s suggestion that the law of injunctive relief in patent cases should be the same law that is applied in other areas of law.”

  13. This decision found the D.C. used the wrong test for infringement of a design patent, so they did not need to get into whether or not the defendant raised 103 prior art issues that the patent owner should also have to show it could prevail over in order to get a preliminary injunction.

    There has been at least one CAFC decision with some strange dicta about 103 proofs against design patents, but I do not see any statutory basis for drawing a 103 distinction for design patents? In this case, for example, why would not the extensive body of prior art on snorkel goggles, motorcycle rider goggles, open cockpit pilot goggles, and other such eye prtective goggles be available under a normal 103 test of one of ordinary skill in the ornamental design art? Especially in view of KSR?

  14. In my view, eBay places this notion in serious question.

    Why?

    Notwithstanding eBay (permanent vs preliminary contrast aside), I cannot see how eBay displaces the relative authority between the other circuits and the Federal Circuit. Put simply, what eBay has to say matters not here. Perhaps you can give a reason why the decision factors into the particular question being resolved.

  15. I can’t remember the case, but hasn’t there been an intra-circuit split on this preliminary injunction issue in a dissent from a denial of rehearing en banc? I feel like some of the judges have raised an issue with the “substantial question of validity” standard for likelihood of success on the merits.

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