By Jason Rantanen
Robert Bosch LLC v. Pylon Mfg. Corp. (Fed. Cir. 2011) Download 11-1096
Panel: Bryson (dissenting-in-part), O'Malley (author), Reyna
This is a very important Federal Circuit decision that firmly eliminates the presumption of irreparable harm in the context of injunctive relief. While laying this issue to rest, however, the court offers an alternative idea: that even post-eBay, courts should (and implicitly must) consider the fundamental nature of patents as property rights when conducting an injunction analysis.
This case involves wiper blade technology. Bosch, the patent holder, sued Pylon for infringement of a set of wiper blade patents. At the trial court level, Bosch prevailed on a jury finding of validity and infringement before requesting entry of a permanent injunction. The district court denied the injunction and Bosch sought interlocutory appeal of the denial while the damages determination was pending.
The presumption of irreparable harm is dead. Much attorney and commentator ink has been spilled over whether the presumption of irreparable harm following judgment of infringement and validity survived eBay Inc. v. MercExchange, L.L.C. The Federal Circuit's opinion in Bosch v. Pylon should put an end to any further debate. "We take this opportunity to put the question to rest and confirm that eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief." Slip Op. at 10. Although not expressly stated by the court, the unequivocal implication is that this is as true for preliminary injunctions as it is for permanent injunctions.
Long live the requirement that courts acknowledge the fundamental nature of patents as property rights! While affirming the death of the presumption of irreparable harm, Bosch simultaneously suggests an alternative approach that perhaps may turn out not all that different: the importance of recognizing that patents are property rights when performing the injunction analysis.
Although eBay abolishes our general rule that an injunction normally will issue when a patent is found to have been valid and infringed, it does not swing the pendulum in the opposite direction. In other words, even though a successful patent infringement plaintiff can no longer rely on presumptions or other short-cuts to support a request for a permanent injunction, it does not follow that courts should entirely ignore the fundamental nature of patents as property rights granting the owner the right to exclude.
Slip Op. at 11. In other words, "While the patentee’s right to exclude alone cannot justify an injunction, it should not be ignored either." Id.
In the end, however, Bosch makes little use of this new approach, instead focusing on other types of errors committed by the district court. Thus, it remains to be seen whether a failure to consider the "fundamental nature" of patent rights will be grounds for reversal.
Reversal of district court denial of permanent injunction: In reversing the denial of an injunction, the court applies an approach reminiscent of the Supreme Court's own jurisprudence in recent years.
Over the past quarter-century, this court has encountered many cases involving a practicing patentee seeking to permanently enjoin a competitor upon an adjudication of infringement. In deciding these cases, we have developed certain legal standards that inform the four-factor inquiry and, in particular, the question of irreparable harm. While none of these standards alone may justify a general rule or an effectively irrebuttable presumption that an injunction should issue, a proper application of the standards to the facts of this case compels the conclusion that Bosch is entitled to the injunction it seeks. It is in ignoring these standards, and supplanting them with its own, that the district court abused its discretion.
Slip Op. at 12. Under this precedent, the court identifies two related legal errors and an error of judgment; taking the all the factors together, the majority concludes, compels the entry of a permanent injunction. The legal errors consisted of the district court's conclusions that the presence of additional competitors in the market, without more, cuts against a finding of irreparable harm, as did the non-core nature of Bosch's wiper blade business in relation to its business as a whole. "Injuries that affect a “non-core” aspect of a patentee’s business are equally capable of being irreparable as ones that affect more significant operations." Slip Op. at 16. Ultimately, the trial court's error "arises from its conclusion that, if a fact supports the granting of an injunction, its absence likely compels the denial of one. That is not the law, however." Slip Op. at 17.
Dissenting in part, Judge Bryson disagreed with the majority's decision to remand with instructions to enter an injunction. While Judge Bryson would not have affirmed the denial of an injunction, nor would he have expressly reversed, instead preferring to remand the matter back to the district court for further findings of fact and a reweighing of the equities.