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A split panel of the U.S. Court of Appeals for the Federal Circuit has ruled that the District of Delaware abused its discretion by denying a permanent injunction in a patent infringement case. On Oct. 13, the Federal Circuit reversed Judge Sue Robinson’s November 2010 denial of Robert Bosch LLC’s motion for a permanent injunction against Pylon Manufacturing Corp. Bosch’s motion followed a jury verdict that Pylon infringed claims in two of the four Bosch beam-type automobile wiper blades at issue in the case. The Federal Circuit remanded the case for Robinson to enter an injunction. The ruling offers guidance for future cases involving injunction disputes. Although the court found “overwhelming evidence” of irreparable harm in the case, it also clarified that the U.S. Supreme Court’s 2006 ruling in eBay Inc. v. MercExchange LLC “jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.” Bosch sued Pylon in August 2008. In August 2009, the district court granted Pylon’s motion to bifurcate the issues of damages and willfulness. In March 2010, Robinson granted Bosch’s summary judgment motion, finding that Pylon infringed two claims of the patent. She also disposed of claims related to the two other patents, granting Pylon’s summary judgment motion for noninfringement of those patents. Robinson denied Bosch’s permanent injunction motion on the ground that Bosch would not suffer irreparable harm without it. Robinson outlined three reasons: Bosch failed to define a relevant market; other competitors also affected Bosch’s business; and Bosch’s wiper blade business isn’t a core part of the company. Judge Kathleen O’Malley wrote the opinion, joined by Judge Jimmie Reyna. Judge William Bryson authored a dissenting-in-part opinion. O’Malley wrote that “the [district] court committed a clear error of judgment when it concluded that Bosch failed to demonstrate irreparable harm in the face of overwhelming evidence to the contrary. This is particularly true in light of Bosch’s evidence of: (1) the parties’ direct competition; (2) loss in market share and access to potential customers resulting from Pylon’s introduction of infringing beam blades; and (3) Pylon’ lack of financial wherewithal to satisfy a financial judgment.” O’Malley observed that the Supreme Court in eBay outlined a four-part test that patent owners seeking a permanent injunction must show: irreparable injury; that legal remedies like monetary damages cannot compensate for the injury; that an equitable remedy is warranted because of the balance of hardships between the plaintiff and the defendant; and that a permanent injunction would not be a disservice the public. The Court in eBay ruled that district courts should not issue automatic injunctions when there’s a finding of patent infringement. O’Malley noted that before eBay, the Federal Circuit applied an express presumption of irreparable harm to a plaintiff likely to succeed on a patent infringement claim’s merits. She observed that the Supreme Court did not expressly address the presumption of irreparable harm question, and the Federal Circuit’s later cases did not clarify whether the presumption was still in force. “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,” O’Malley wrote. She cited a 2d Circuit and a 9th Circuit ruling, which reached the same conclusion about a similar presumption in copyright infringement cases. She clarified that “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.” After analyzing how the eBay factors apply to the facts in this case, O’Malley wrote that the majority did not believe remanding the case to the district court for an additional hearing before entering the injunction would be appropriate because there’s undisputed, conclusive evidence that permanent injunctive relief is warranted: “We agree with Bosch that, on the record as it stands, any alternative result on remand necessarily would be an abuse of discretion.” She observed, that remanding the case for additional hearings before an injunction could be issued “would punish the patentee for the district court’s decision, at Pylon’s urging, to bifurcate the trial and for the district court’s erroneous application of the law to the evidence before it.” O’Malley also noted that the majority agrees with the dissent that “normally a district court should balance these equitable considerations in the first instance, but the facts of this case compel a different result. Unlike the cases on which the dissent relies, including eBay itself, where the district courts either could not have or did not apply the standard announced in eBay, the parties and the district court in this case were well aware of the eBay standard when developing and applying the record.” In his partial dissent, Bryson wrote that he agrees with the majority that the district court erroneously applied the eBay factors, but disagreed that the record compels an injunction. Bryson noted that whether Bosch is eligible for an injunction is a fact-intensive inquiry that involves a careful balancing of competing equitable concerns: “I would therefore not direct the entry of an injunction, but would follow the ordinary course of remanding for the district court to decide whether an injunction should issue based on a proper application of the four-part [eBay] test for granting permanent injunctive relief.” Bosch’s lawyer, Mark Hannemann, a partner at New York’s Kenyon & Kenyon, said that, although eBay abolished automatic permanent injunctions, “it does not swing the pendulum in the opposite direction,” particularly in traditional patent infringement cases involving competitors. “There had been other jurisprudence floating around [after eBay] that it was somehow an exceptional event to get an injunction, and I think that’s what the Federal Circuit was pushing back on,” Hannemann said. Gregory Hillyer, a Philadelphia partner at Feldman Gale, who argued for Pylon, said the company and its legal team strongly disagree that Bosch’s evidence was sufficient to establish irreparable harm. They do however, agree with the Federal Circuit’s decision to eliminate the presumption of irreparable harm, Hillyer said. “Given the apparent disagreement or confusion in the circuits on that issue the Federal Circuit was right to resolve it,” Hillyer said. “We also believe that it was correctly resolved and there can be no such presumption.” Sheri Qualters can be contacted at [email protected].

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