In eBay v. MercExchange (2006), the Supreme Court ruled that an adjudged infringer should only suffer permanent injunctive relief once the traditional four-factor test of equity had been satisfied. This general priciple was recently supported by the non-patent Supreme Court case of Monsanto v. Geertson (2010). In Monsanto, the court wrote “An injunction is a drastic and extraordinary remedy, which should not be granted as a matter of a course.” The court’s apparent patent-law-centrist, Justice Kennedy, wrote a concurring opinion suggesting that times-have-changed and that courts may have good reason to frequently deny injunctive relief. With some flair, Justice Kennedy suggested that the “potential vagueness and suspect validity of some … patents may affect the calculus under the four-factor test.”
In many respects, Justice Kennedy’s statement from eBay seems odd. The issue of permanent injunctive relief only arises after trial — after the patents are deemed valid and infringed. The trial is intended to remove any question regarding potential invalidity of the patent rights. However, in a recent amicus brief to the Federal Circuit, Verizon attempts to provide some explanation and some teeth to Kennedy’s proposal. (Justice Kennedy’s statement has been quoted and discussed in over 80 law review articles over the past four years.)
The Verizon brief was filed in the pending en banc case of TiVo v. EchoStar. That case focuses on whether the infringement of new products introduced by an adjudged infringer should be analyzed through contempt proceedings or through a new trial.
Verizon’s brief does not focus on the questions at issue in TiVo, but rather addresses the broader question of whether injunctive relief should be issued in-the-first-place. Expanding on Justice Kennedy’s statements, Verizon argues that — even after a patent is determined valid at trial — the court must consider the possibility that the patent is invalid as part of the injunction analysis:
The need to ensure that equity “mould[s] each decree to the necessities of the particular case,” Hecht, 321 U.S. at 329, requires that a district court take into account the possibility that a patent – issued and adjudged to be valid in the context of an infringement trial – is, in fact, invalid.
To explain its position, Verizon points to a specific (and common) situation — where the infringed patent is pending reexamination at the USPTO. The brief states boldly that “the pendency of a PTO reexamination proceeding weighs strongly against imposition or continuation of an injunction.”
Verizon filed its brief early, the first round of briefs are not due until July 26, 2010.
Read Verizon’s brief here [File Attachment: TiVo.Amicus.Verizon.pdf (150 KB)]
Edited to correct an error (I had said that Chief Justice Roberts wrote the eBay majority).