Court Finds Patent Invalid; Then Orders Defendant to Stop Infringing

By Dennis Crouch

Following the Supreme Court’s equitable relief decision in eBay, many patentees have found it difficult to obtain injunctive relief to stop ongoing infringement – even after final judgment that the patent is both valid and infringed.

In a recent decision, the District Court Judge Blake (D.Md.) seemingly flipped eBay on its head by enjoining TWi Pharma from making or selling a generic version of Par’s patented Megace ES formulary. The upside-down element of the decision is that the order granting the injunction issued only after the court found the patent claims invalid as obvious. Par Pharma v. TWi Pharma, 1-11-cv-02466 (MDD August 12, 2014, Order). To be clear, the order here is not for permanent relief, but only relates to injunction pending appeal.

The doctrine involving the grant of equitable relief pending appeal is a bit squirrelly – especially at the district court level because the general setup involves the court deciding that its decisions are likely wrong. Recognizing that, the law does not require the moving party to show that its case is a likely winner but only a substantial likelihood that the requested equitable relief will be entered as a result of the appeal. Applying this standard, the district court writes:

Par claims that it will succeed on the merits because this court erred in its application of the law with respect to motivations to combine the prior art and inherency. Although the court stands by its judgment, it recognizes that the case presents a close call. Further, the Federal Circuit will conduct a de novo review of whether the ‘576 patent is obvious, including whether this court properly interpreted the law regarding motivation and inherency. . . . The court is not persuaded Par has demonstrated a “strong” likelihood of success on appeal—especially given that most of its dispute with this court’s earlier decision is only rehashing the legal arguments it has already made. Par has, however, made a showing of a substantial case.

The district court joined this “substantial case” on appeal with strong evidence of irreparable harm absent relief in its decision to grant the injunction pendente lite.

Regarding the ‘public interest’ element of equitable relief, the court found that element neutral.

The court recognizes that the public is served by the availability of low-cost generic medications, especially where an invalid patent has previously barred their entry into the market. On the other hand, the public also has an interest in the protection of valid patents because it promotes innovation. This factor, therefore, is neutral.

An interesting and problematic element of the court’s decision here is that the doctrinal approach makes it easier for a patentee to obtain temporary relief following an adverse final judgment (of invalidity) than prior to such a judgment. The doctrinal difference highlighted by the court between preliminary injunctive relief pending final judgment and post-decision relief pending appeal is simply that the proof of likelihood-of-success is reduced for relief pending appeal. This is obviously problematic because in the second case, the court will have already reached a final judgment that the patentee loses.

In making its decision, the district court applied Federal Circuit precedent regarding relief pending appeal. However, those cases relate generally to the asymmetrical situation of staying-injunctive relief pending appeal rather than, as here, granting injunctive relief pending appeal.

There is a better approach that still recognizes the potential need for injunctive relief pending appeal and that is simply requiring a greater showing of need for relief (irreparable harm; balance of hardships; public interest) when the likelihood-of-success element is reduced.

73 thoughts on “Court Finds Patent Invalid; Then Orders Defendant to Stop Infringing

  1. Dennis, in your title, you say, “stop infringing.”

    I don’t think this is entirely accurate. If I understand it, in ANDA cases, the gen eric has no right to make or sell anything unless and until a court “finally” decides either the patent is invalid or that the prospective drug is non infringing.

  2. Further, the Federal Circuit will conduct a de novo review of whether the ’576 patent is obvious, including whether this court properly interpreted the law regarding motivation and inherency

    It is hard not to read this as the D.Ct. Judge saying, “I have no idea what to expect from the Federal Circuit, so I’m just going to leave the practical effect of my ruling at the status quo and then let them tell me how wrong I am.”

    1. “I have no idea what to expect from the Federal Circuit, so I’m just going to leave the practical effect of my ruling at the status quo and then let them tell me how wrong I am.”

      You’d have to imagine that’s how everyone feels with how the federal circuit acts.

    1. Martin, who sued Sendouts? Was the patent invalid, not infringed, or was it the way the patent holder conducted the litigation that was the problem?

    2. I see Sendouts was acquired by another recruiting software company — hardly being “destroyed.” I saw that Sendouts (among others) was sued by Kenexa, but I believe Kenexa is a large company in the field.

      So, to echo Ned’s question, who sued Sendouts and why was the patent litigation “abusive”?

        1. Let’s see the asserted claims.

          You’re going to love this one, from asserted patent 5,999,939. I certainly hope that the prosecution didn’t turn on the phrase “nonuniformly formatted” in the preamble, but I’ll bet a dollar that it did. The claim appears to be for a method for filling in a form, by multiple users.

          1. A method for facilitating the accurate transfer of information from each of a plurality of nonuniformly formatted source data streams into a structured database, said method comprising the steps of:
          supplying digital data representing each of a plurality of source data streams from a plurality of users, each said source data stream containing data corresponding to multiple discernible source data strings;
          processing said digital data for extracting selected ones of said source data strings and generating related target data strings;
          displaying a structured form comprised of multiple fields, each field being capable of accommodating a data string and wherein one or more of said fields have said target data strings inserted within;
          enabling each user to modify and/or accept said target data strings inserted within said displayed form corresponding to said source data stream originating from said user; and
          storing data corresponding to said data strings from said form fields into a database.

        2. Let’s see the asserted claims.

          This will be eventually be a repeat, thanks to the bizarre “ge n e” filter.

          You’re going to love this one, from asserted patent 5,999,939. I certainly hope that the prosecution didn’t turn on the phrase “nonuniformly formatted” in the preamble, but I’ll bet a dollar that it did. The claim appears to be for a method for filling in a form, by multiple users.

          1. A method for facilitating the accurate transfer of information from each of a plurality of nonuniformly formatted source data streams into a structured database, said method comprising the steps of:
          supplying digital data representing each of a plurality of source data streams from a plurality of users, each said source data stream containing data corresponding to multiple discernible source data strings;
          processing said digital data for extracting selected ones of said source data strings and ge ne rating related target data strings;
          displaying a structured form comprised of multiple fields, each field being capable of accommodating a data string and wherein one or more of said fields have said target data strings inserted within;
          enabling each user to modify and/or accept said target data strings inserted within said displayed form corresponding to said source data stream originating from said user; and
          storing data corresponding to said data strings from said form fields into a database.

          1. That patent is being asserted against my company by IBM Kenexa right now.

            They have shown every attribute of a patent troll in this case: 5,999,939 is old, abstract, anticipated, obvious, tortuously prosecuted, and the three times removed residue of a bankruptcy of notorious first actors. They have since piled new patents on top of that original garbage.

            Troll like, they demanded a settlement at a figure that’s likely more than our net profits combined for a decade. The accused feature was an option of a sub-component, with separate accounting and a statistically reliable usage model , not amounting to more than a handful of thousands of dollars in a reasonable royalty negotiation at the time.

            Of course, at that time, we were coding the thing in our mom’s family room and Monica Lewinsky had never been heard of. We don’t want a license now; we disappeared the feature and nobody even noticed.

            Because of the litigation, its difficult to get any interest in outside capitalization for the company, we have had to hire several fewer people, we have been forced to travel cross-country multiple times, and large amounts of our attention has been diverted all the way through discovery. Not to mention that this is directly lowering the standard of living of our families. It’s a Kafkaesque nightmare, and for what?

            We were one of twelve originally sued at the same time, with no warning. Trollish, of course. They scurried out of Delaware when they drew Judge Robinson, who showed little love for their previous fishing expedition in another case, when they tried to pick on someone their size.

            There are three of us left in the case. The fact that we have horrifyingly expensive district court proceedings of virtually no legal value only adds atmosphere to the general hopelessness of ever dislodging this pestilence. This opinion is not only mine, but that of a judge in the very court we are stuck in.

            It seems unjust that the legal system did not have some way to look at the basic facts here and dispose of this matter. It didn’t. That’s why I have learned about patent law and I intend to keep learning about it.

            What I see is a historically great set of doctrines, cases, and laws that work pretty damn well in the world of THINGS that’s been hideously perverted to work in a world of IDEAS.

            Software is made up of ideas, written in a language. The mere expressions of ideas written in languages can NEVER be adjudicated reliably by different rational minds.

            I believe the copyright concepts of deciding when a copy is too close are far more applicable; everyone goes in knowing it’s a judgment call instead of performing an endless insanely elaborate kabuki of objectivity at huge expense.

            The Markman transcript in our case is available. In it you may find IBM, the giant advocate of quality software patents, arguing, in 2014, that the use of the Internet for their “method” confers novelty.

            With distance, I would be amused.

            1. Martin, I see no requirement for “internet” in the claim — just multiple users. But after that, there is only a standard interaction between one user and the form he is filling out. The link between the multiple users and the one is not set forth and the claim and is unclear as all get out.

              Can anyone else tell me, from the claim, how the data streams from multiple users has anything to do with the interaction of the one user with the form?

              I also note, but have not reviewed, that patent 6996561, a CIP, was in reexamined in 2008. 95/001,060 In that reexamination, the Board had, in 2011, already affirmed the rejection of the claims. The patent owner then requested that reexamination be reopened. Instead, the PTO terminated the interpartes reexamination because the petitioner was subject to a consent decree that it had not sustained its burden of proving the patent invalid.

              1. Ned, I believe that the 2011 action was a result of the settlement between Taleo and Kenexa.

                We can’t even read in these claims that the world wide web is required; only a “remote communication interface”

                I might add that our own software anticipates every single claim, which only adds insult to the major injury we are suffering over this. Its gonna cost probably a million bucks to prove that to the satisfaction of the pre-season referee. Then onto the real game I suppose…

                Without the Internet, the only other source of novelty could be the idea of human verification of extraction results, which is nutty because that was the default and universal requirement for extraction technology, which they could NOT patent as it had been patented for years prior.

                They held contests back then (MUC conferences) whose sole objective was to score extraction systems against human verifiers.

                Yesterday I found out they were hassling customers of ours too, because its been maximum hardball from the first minute.

                This family of patents is an absolute pox and rarely (ever) will you catch IBM this far into the trolling playbook.

            2. “What I see is a historically great set of doctrines, cases, and laws that work pretty damn well in the world of THINGS that’s been hideously perverted to work in a world of IDEAS.”

              Precisely the case. Tell congress.

              1. Yes, Martin, we know.

                The law used to be well established that one could not patent an idea, something nonstatutory, until along came Judge Rich and the CCPA/Federal Circuit who were nominalists. If they saw machine recited in the claim they saw patentable subject matter, move on to 102/103/112. Prior to Judge Rich, the courts focused on whether the novel subject matter was patentable subject matter. After Judge Rich, the CCPA and the Federal Circuit refused to include in the inquiry any investigation as to novelty – basically saying that was a topic for 102/103. But their approach, taken literally, would simply render 101 a dead letter because now anything could be patented by simply sprinkling the claim with old, but otherwise eligible subject matter.

                The Prometheus case illustrates just how far the Federal Circuit would go to ignore Supreme Court cases and other cases from other circuits, and their own predecessor CCPA cases, that would focus the patentable subject matter inquiry on the novel subject matter. The Federal Circuit in Prometheus reaffirmed their prior holding that the subject matter of the claim was patentable because the old elements of the claim included transformations. This effectively allowed the claim to cover the new information about the correlations.

                Try as you might, the Federal Circuit absolutely refuses to follow historical law or the Supreme Court law unless someone actually rubs their collective noses in it.

                You will also see posters here like Oh No continuing to cite Federal Circuit cases that will give weight to nonstatutory subject matter for both 102/103 purposes. They absolute refuse to give up.

            1. Taleo settled three days into the trial. The summary opinion was interesting – Judge Robinson suggesting that had Taleo briefed obviousness more fully they might have had something. She was uncomfortable even doing the trial (per conference transcripts) because of pending appeals on office action against the patent.

              The patent office tried to eject this garbage multiple times but sheer weight of lawyering got it done, and then redone. The arguments in the re-exam are basically “but its on the Internet”.

              Kenexa did not want to risk it again with a real defendant, so they sued a bunch of Palookas, IMO to look big, like they had valuable IP and a big license stream ahead, and IBM bought it hook, line, and sinker and has no intention of walking away from it….

              The Supreme Court and Federal Circuit have made it clear to even the untrained that just being on the Internet is not enough.

              Does that slow the folks messing with our livelihoods down? Not one a bit. Only sunshine and getting the press they richly deserve is going to deter IBM Kenexa on this matter.

              1. Martin, the ‘939 patent was reexamined in 90/006,570. A plenitude of art was cited showing user updates of scanned or typed materials for eons. The patent owner argued that the users in the prior art were not the originators.

                That argument on its face is ridiculous.

              2. Also, Martin, multi-user databases are notoriously old way-way back. There is nothing novel about multiple users updating the same record in a DB, being able to input, update, display or anything such thing.

                This claim reads on prior art notoriously old 40 years ago.

                How the PTO could issues such bogus cr*p is a wonder.

                That IBM is harassing small business for revenues is not surprising because that has been their business model since Marshall Phelps took over as VP IP circa 1990. Because of his achievements as the archetypical troll, Phelps was inducted into the Troll Hall of Fame (It goes by a different title.)

  3. This is absurd: The court recognizes that the public is served by the availability of low-cost ge neric medications, especially where an invalid patent has previously barred their entry into the market. On the other hand, the public also has an interest in the protection of valid patents because it promotes innovation. This factor, therefore, is neutral.

    Good lorb, where do judges come up with silliness like this? The public’s alleged interest in “the protection of valid patents” is completely irrelevant to the question of injunctive relief, and doubly so when the court has already determined that the patent is invalid. Any interest that the public has in “protecting valid patents” is reflected in the legal burdens put upon the defendant who seeks to invalidate the patent — burdens which were met in this case, according to this same judge! What’s “neutralized” in this case is that alleged public interest because the public has zero interest in “protecting” patent rights that should never have been granted in the first place.

  4. a judge frequently rules one way on the constitutionality issue but another way on whether or not to grant a preliminary injunction pending appeal

    Sometimes judges do that when Constitutional issues are involved because they believe that the Supreme Court needs to provide the final word and, until then, the parties get put in a holding pattern (i.e., the aggrieved party is forced to wait before it can freely exercise its Constitutional rights because, e.g., think of all the harm it will do to your marriage if we let those other people get married, too).

    As Dennis points out, the bizarre result in this patent case is that, everything else being equal, it is easier to grant the injunction after the patent is found invalid by the district court than it is before the patent is found invalid.

  5. “On the other hand, the public also has an interest in the protection of valid patents because it promotes innovation. This factor, therefore, is neutral.”

    Interesting question to present to the supremes. The public obviously does have an interest in the provision and enforcement of valid patents, though the “protection” of valid patents or invalid patents does not seem, on first glance, to be among what the public has an interest in.

      1. Enforcement, as far as I’ve been made aware, usually involves sending letters, engaging in talks, filing in court, litigation, etc.

        Protection of any given patent is exactly what it sounds like. Protecting the patent itself. Be it through judicial tomwankery skewing the scales of justice in favor of the patentee, the judiciary intentionally creating standards that make it difficult to invalidate a patent, or even, as here, the judiciary making up some wild tomschemery to skew the equitable finding to justify the imposition of an injunction.

    1. The public interest is in a SYSTEM that enforces patents that are to be taken as valid. That interest is real. The public interest does not extend to seeing enforced any one specific patent, the validity of which is still very much in issue.

      1. The validity and usefulness of the system of which you speak is eroded each time a court fails to enforce a valid patent. Therefore there IS a public interest in seeing specific valid patents enforced.

    2. I think that its right to say we have a longstanding public interest in enforcing patent rights that are both validly issued and being infringed upon. Ordinarily that enforcement is done through an award of damages. However, injunctive relief can serve as an alternative when the available damages are inadequate to compensate for harms caused by the infringement. Joining these presumptive statements, gets us to the rough conclusion that there is a public interest in awarding equitable relief to enforce valid and infringed upon patent rights at times when damages-at-law are insufficient.

      In this sense, the public interest factor of equitable relief depends upon satisfaction of the insufficiency-of-damages factor as a prerequisite. (Meaning also these are not independent factors).

      1. Respectfully, the traditional notions of equity that you mirror in your statement are a little cramped under a big picture view.

        The goal of equity is to restore the transgressed as near as possible to the state she would have been prior to the transgression.

        Period.

        The typical notions of doing this with money and that injunctions are the “most severe” remedies need to be taken into the context of what it is that has been transgressed, and what is naturally the closest and best approximation to restoring the transgressed to that state.

        This is one of the biggest faux pas – as easily seen in the eBay decision – focusing far too much on the trees of the rules of equity, and forgetting which forest that the tool of equity is being used in.

        It is one thing to say that patent law should conform to the rest of the treatment of law, and it is quite another to ignore those aspects of patent law that clearly indicate that patent law is just NOT the same as other areas of law.

        1. The goal of equity is to restore the transgressed as near as possible to the state she would have been prior to the transgression.

          Source?

              1. the root of the word, “equi”

                As far as I can establish, the root of “equity” is not “equi,” and “equity” does not derive from anything meaning “to restore.” Are you just making this stuff up, or do you have a source?

                Are you really questioning the most basics of premises here?

                Well yes, since that’s the premise that your entire criticism in 3.3.1 is based upon.

              2. That then appears to be the source of your problem.

                That’s one source. The other is your inability/unwillingness to tell us where you get your premise that “the goal of equity is to restore the transgressed as near as possible to the state she would have been prior to the transgression.”

                Which means that we can ignore everything that follows that premise. See, that’s how argumentation works.

              3. I already told you. Dig that wax out of your ears.

                No, you didn’t provide anything remotely like a source for your premise. In response to a legitimate attempt to understand your position, you instead provided an apparently made-up definition for an apparently made-up root of the word “equity.” And now you’re going to try to bury it under a series of evasions and insults.

                I hear you just fine, thanks.

              4. You are note hearing me just fine thanks – as you continue to have what is essentially a “you” problem, and you continue NOT to understand the very basics of why we have equity to being with.

              5. …you continue to have what is essentially a “you” problem, and you continue NOT to understand the very basics of why we have equity to being with.

                Evasions and insults. Gee, who could have predicted that?

              6. Gee, dust-kicking and nonsense pursuit while ignoring the answers given, who could have predicted that?

                (any time you want to actually add a comment on point, please feel free to do so)

              7. Dan bro, that thread you just engaged in is what happens when you call out a pathological liar. All the “problems” are with “you”. Lulz. They’re never with the psy chopathic pat ho lo gical liar.

                Remember, he’s just a GUI designer with a handful of mental problems that really really likes to pretend to be a lawlyer.

              8. Dan bro, that thread you just engaged in is what happens when you call out a pa th olo gi cal liar. All the “problems” are with “you”. Lulz. They’re never with the psy chopathic pat ho lo gical liar.

                Remember, he’s just a GUI designer with a handful of mental problems that really really likes to pretend to be a lawlyer.

              9. All the “problems” are with “you”. Lulz. They’re never with the psy chopathic pat ho lo gical liar.

                Yes, that’s abundantly clear. After all, he has “answered” all the questions multiple times. The rest of us are just too bli nd to see those answers, since we have wax in our ears. Or something like that.

              10. What is “abundantly clear” DanH/Leopold, is that you have not changed your spots with your change in moniker, and the fact that 6 aligns with you should be a red flag to you.

                Or something like that.

              1. You sure there isn’t a legal context meaning for the word?

                Of course there is, Les, which is why someone who isn’t making stuff up could point you to a source for the assertion that “equity” derives from a root that means “to restore.”

                I looked at Black’s Law Dictionary’s definition for equity, and found no mention of “restore.”

                I wonder why anon won’t tell us his source.

              2. I wonder why anon won’t tell us his source.

                Asked and answered – I wonder why DanH/Leopold continues to attempt to kick up dust on a collateral issue…

        2. Anon – I don’t actually understand what you are arguing here. I certainly don’t think that equity is limited to the sole goal that you propose. Is your suggestion then that the public interest is an improper concern of equity?

          1. Prof Crouch,

            I am not saying anything about limiting equity to a sole goal.

            I am saying that in context – patent law context in particular – the very reason why we strive for equity should play more of a role than the cramped view that “injunctions” are the most severe form of equitable treatment.

            The nature of the right itself – a negative right – makes a critical difference that is often lost by [a more typical treatment].

          2. OK. This makes some sense to me – that the nature of patent rights changes the calculus of injunctive rights as compared to other potential regimes (such as, for examples, real property).

            Although the Supreme Court in eBay rejected the idea that we should have a different rule for patent cases, it did not foreclose this particular argument insofar as it is explained situationally rather than as a particular patent rule.

            However, when doing this type of analysis, most folks come to the opposite conclusion of yours. You say that patents should be more likely to deserve injunctive relief because it is only a negative right. The more common argument is the reverse – that
            injunctive relief should be less often granted since inventions are largely non-rivalrous and thus that patent infringement causes less direct harm than would someone taking your car.

          3. The “non-rivalrous” comment is a red herring – and expressly does not focus on the nature of the right.

            Of course, unstated here is that infringement is found (remedy is warranted). In such case, “rivalrous” or not simply does not matter.

            The nature of the right – and how best a remedy can be fashioned is what is key.

          4. …and yes, I recognize what the Court said in eBay – the point being that in a larger view, the Court sought to ignore the very nature of the item before it – or at least, many commentators speaking about the take-away from the ebay case have said – there is a subtle, but very real distinction between what the Court has said and what pundits have said that the Court has said.

          5. …as far as not having a different rule, I look to that thrust as MORE not handwaiving the four factor analysis and LESS a different treatment of what having a patent right means to begin with.

            This goes hand in hand with the overall thrust of many to diminish what that patent right means in our modern society (for a multitude of different philosophical reasons).

      2. Respectfully as well, there tends to be a “clenched tight eyes” approach given to the abundant rhetoric that mere enforcement of patent rights must somehow be “wrong.”

        Often this is disguised as being “Tr011ish” or “picking on end users,” so while the government report of last summer (no, not the Whitehouse propaganda piece – the other report) largely debunked the hysteria being whipped up with the denigration of “Tr011,” and patent law has yet to be changed to redefine infringement as to exclude end users, there is no shortage of “policy”/opinions being blathered about in a naked attempt to shape public perception (as opposed to deal forthrightfully with any objective issues)

          1. Perhaps you could translate his point into English right fast for the rest of us that don’t speak psy cho pathese. You know, if you have the time D.

      3. “Joining these presumptive statements”

        I’m not even sure why you or a judge would want to join those presumptive statements in the first place. Perhaps you could tell us why.

        Also perhaps you could tell us what your entire comment has to do with what the court said. The court specifically said that the public has an interest in protecting valid patents. It did not say that the public has an interest in enforcing valid patents, or valid patents being enforced, or anything else along those lines. Your comment appears directed to the later and not the former.

        “Joining these presumptive statements, gets us to the rough conclusion that there is a public interest in awarding equitable relief to enforce valid and infringed upon patent rights at times when damages-at-law are insufficient.”

        That’s a pretty “rough” conclusion. But as I mentioned, even if it does, what does that have to do with protecting valid patents? Looks like you’re explicitly talking about a public interest in “protecting” companies that have patents from damage that cannot be remedied at law. Not protecting the patent.

        “In this sense, the public interest factor of equitable relief depends upon satisfaction of the insufficiency-of-damages factor as a prerequisite.”

        I’m less than convinced we can make such a leap for protection of patents. Maybe we can make that leap for protecting companies from damage that cannot be remedied at law, maybe not. But not for protection of patents.

  6. 1) this is why patent law appears insane to many people 2) this surely demonstrates beyond doubt that district court proceedings are about as useful as preseason football games….

    1. It only appears insane because of your bias against patent holders.

      If Par Pharama won on invalidity/infringement and TWi Pharma appealed to the Federal Circuit, would you have a problem with the Court denying injunctive relief to Par Pharma?

      BTW — this issue is not the sole province of patent law. One need just follow cases that involve the constitutionality of a particular statute to realize that a judge frequently rules one way on the constitutionality issue but another way on whether or not to grant a preliminary injunction pending appeal. Two different standards can mean two (very) different results.

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