MIA: Preliminary Injunctions Part II continued

Posted on | April 29, 2008 | No Comments

We continue with our review of 2007 and 2008 CAFC decisions on preliminary injunctions in patent cases.

ERICO Int’l v. Vutec Corp., 516 F.3d 1350 (Fed. Cir. Feb. 19, 2008) [Newman, Rader, Dyk].  The CAFC vacated the PI, finding that defendants had raised a sufficient § 103 argument.   The district court had written two opinions on PI, performing an extensive analysis of obviousness, secondary indicia, etc., but the CAFC, reviewing the same evidence, reached a different conclusion:

Claim 17 is vulnerable based on invalidity. . . .  Doc’s invalidity challenge based on obviousness cast enough doubt on the validity of Claim 17 to negate likelihood of success on the merits as to infringement of a valid patent.  At this point, of course, Doc’s has only cast doubt on the validity of the ‘994 patent.

After ERICO, there is now language in CAFC opinions about "substantial questions of invalidity," and "vulnerability" and, now, "casting doubt" on the validity.   As Judge Newman discusses in her ERICO dissent, this language–and its use in the various cases–suggests an erosion of the standard.

ERICO also witnessed the CAFC panel abandoning the appellate review standards (abuse of discretion based on clear errors of fact or law) in favor of a de novo review.  The ERICO panel never explained why or how the district court’s decision was clearly erroneous–instead the opinion is dedicated to justifying its own decision.  Or, as phrased in the petitions for rehearing, the panel "retried rather than reviewed."*

Regents of Univ. of Cal. v. Dakocytomation Cal., Inc., 517 F.3d 1364 (Fed. Cir. Feb. 28, 2008) [Mayer, Lourie, Prost].   The CAFC affirmed the district court’s denial of a PI.  Plaintiff’s appeal involved a combination appeal of the PI order as well as an interlocutory appeal of partial summary judgment of non-infringement.  Cal asserted that the district court’s claim construction was wrong (the construction led the court to conclude that Cal was not likely to show infringement).  The CAFC agreed with enough of the PI claim construction to affirm the PI ruling, but found that the court did err in construing some of the language.

The CAFC did not, however, appear to give any deference or consideration to the district court’s claim construction with respect to the PI.  While it didn’t change the PI outcome, shouldn’t the district court’s preliminary claim construction at the PI stage been reviewed for clear error?  The blurring of the standard may have been partially due to the simultaneous appeal of claim construction for summary judgment which would, of course, be reviewed de novo.

A G Design v. Trainman Lantern Co., 2007-1481 unreported (Fed. Cir. March 24, 2008) [Rader, Schall, Prost].  The CAFC reversed the grant of a PI.  First, the CAFC reviewed the allegations of infringement by equivalents, particularly the impact of a narrowing amendment during prosecution.  While plaintiff had a rebuttal argument that prosecution history estoppel should not apply because of a Festo tangential theory, the CAFC didn’t much like the argument.  The court next turned to defendant’s § 102 challenge based on AG’s  publicly-disclosed prototype.  The CAFC found that the district court erred in granting a preliminary injunction without providing a detailed analysis of how the prototype lacked any of the claim limitations:

At a minimum the district court should have made a finding as to whether the prototype contains all of the limitations of any of the asserted claimed of the ‘245 patent.  Because the district court’s preliminary injunction order did not include the necessary findings, it erred in reaching the conclusion that [defendant] failed to raise a substantial question as to validity.

As with some of the other recent decisions, the panel explains how and why the record supports reaching a different conclusion than that of the district court, but glosses over the question of whether the district court’s decision was an abuse of discretion based on clearly erroneous findings of fact or clear errors of law.

Judkins v. HT Window Fashion, 2007-1434 (Fed. Cir. April 8, 2008) [Michel, Bryson, Kennelly (ND/IL)].  The CAFC affirmed the denial of a PI.  Like the GP Indus. case from the previous post, the defendant sought a PI against the patentee sending threatening letters to defendant’s customers.   Again, the CAFC found that there was insufficient evidence of "objective baselessness" to conclude that defendant’s had a substantial likelihood of success on the merits.

In our view, these cases raise several interesting points and issues:

• The CAFC panels seem to drift away from the correct standard of appellate review and write opinions sounding like de novo retrying of the issues rather than reviewing the decision below;

• The likelihood of success on the merits is the overwhelmingly dominant factor;

• There is no sliding scale or general weighing of the PI factors;

• The varying language used to discuss invalidity challenges, including: substantial question; vulnerability; and casting doubt, do not sound like the same standard;

• If likelihood of success is not a sliding determination but instead a "yes/no" question, then how much of a likelihood does the patentee need to show?

• Analyzing these factors, particularly infringement and validity, seem troublesome given the differences in burdens (proof and persuasion) and standards (clear and convincing, substantial likelihood) between the PI and trial stages.

The issues and questions from these recent decisions have not been lost on district courts, as two recently filed appeals to the CAFC show.  These cases will be covered in Part III.

* Our law firm, Renner Otto, represented ERICO in the case, although we were not involved in the matter.  Kyle did, however, draft ERICO’s petition for rehearing.

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