Genband v. Metaswitch (Federal Circuit 2017)
At the close of trial, a jury found for the patentee Genband-ruling that Metaswitch infringed all of the asserted claims found in the eight asserted VoIP patents. However, the District Court denied the patentee’s request for an injunction to stop the ongoing infringement. In its refusal, the District Court noted the lack of proof of a causal nexus between the ongoing infringement and the patentee’s allegedly irreparable harm of lost sales. Here in particular, focus is not on whether competition resulted in lost sales, but rather whether the inclusion of the infringing features caused the lost sales. As in the Apple and Samsung cases, this is a situation where the patents cover a few components of a multi-component product. The District Court also noted that the patentee’s delays in filing its infringement action also tended to support its conclusion of no irreparable harm.
On appeal, the Federal Circuit has vacated the injunction denial, holding that it is unclear whether the District Court properly applied the nexus requirement outlined by the Federal Circuit in its Apple v. Samsung decisions.
In what the court is calling Apple II, Federal Circuit wrote that the irreparable harm calculus can be met when “a sufficiently strong casual nexus relates the alleged harm to the alleged infringement.” In Apple III and Apple IV, the court further developed its statement, requiring “some causal nexus between [defendant’s] infringing conduct and [patentee’s] alleged harm” and “a causal nexus linking the harm and the infringing acts” respectively. Here however Federal Circuit suggests that the District Court may have applied to stringent of a nexus requirement when it demanded proof that “the patented features drive demand for the product” before finding irreparable harm. In particular, the appellate court suggested that a patentee need not prove its features are “the driver” of demand but instead may rely upon evidence of being “a driver”. The appellate court also re-oriented the focus of inquiry toward ensuring that the allegedly irreparable injury is being caused by use of the infringing features. This is obviously tricky in a multi-component situation.
Regarding the delay in filing of the infringement lawsuit, the court did not truly review that portion of the decision other than to hold that the timing of the lawsuit filing and decision not to request preliminary relief may be relevant to the determination of irreparable harm.
So, to be clear, to obtain an injunction, the patentee must first win its lawsuit – proving infringement and overcoming any validity challenges (both direct and collateral). At that point, the patentee must then prove the set of equitable “eBay” factors, that include proof that any ongoing infringement would cause irreparable harm. When proving irreparable harm the patentee must take pains to ensure that the claimed irreparable harm is being caused by the infringement rather than some other act by the infringer, and when doing this the appropriate analysis is to consider the extent that the infringing features are driving sales of the infringing device.
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 U.S. Patents Nos. 6,772,210; 6,791,971; 6,885,658; 6,934,279; 7,995,589; 7,047,561; 7,184,427; and 7,990,984.
 See, Apple, Inc. v. Samsung Electronics Co. (Apple III), 735 F.3d 1352, 1364 (Fed. Cir. 2013); and Apple, Inc. v. Samsung Electronics Co. (Apple IV), 809 F.3d 633, 641–42 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 2522 (2016), petition for cert. filed, 85 U.S.L.W. 3460 (U.S. Mar. 10, 2017) (No. 16-1102).