Irreparable harm in patent law

In my prior post (The Federal Circuit Clarifies Injunction Requirements in Patent Cases), I reviewed the Titan case, but my curiosity was piqued by the Court of Appeals noting that irreparable harm, the balance of harms, and the public interest all weighed in favor of the movant; the injunction was denied only because of an unlikelihood of success. So I pulled the lower court’s opinion to see what it said on these subjects: of interest to those who can show a likelihood of success and need to argue these other factors as well.

Patent holders have an interest in not being forced to license their invention. The right to exclude is important. So many cases hold that a presumption of irreparable harm arises from infringement itself.   Most injunction cases rely on an inability to prove money damages to justify irreparable harm arguments, but patent infringement allows money damages, and permits tripling them if the infringement is willful. Why an injunction, then?

The court noted that the potential loss to the moving party may include loss of trade, sales, reputation, and goodwill, some of which may never be remedied with money damages, and the size of the parties’ relative investment.    The court spent time analyzing only a few of these elements.  

  1. The court considered delay, noting that delay in pursuing rights under a patent can negate an argument of irreparable harm, but here the movant explained the delay by its lack of knowledge of infringement, its immediate retention of counsel once discovered, and the short time that elapsed between that time and its sending the cease and desist letter, the investigation of the claims, followed by the lawsuit. The timeline satisfied the court and negated the delay argument.
  2. The reputation component. The inventor can select the companies he or she wants to make the product; if they do so badly, the inventor’s reputation suffers. The opponent failed to offer proof to this argument, so the court deemed that irreparable harm was proven.
  3. Loss of goodwill. It is difficult to quantify the costs of customer confusion. This occurs if one company is licensed to manufacture the product or if the inventor manufactures it; another similarly appearing or functioning product bleeds off sales. Why can’t this be compensated in money damages from the bleedor? The value of a one-time purchase is more than the profit from the sale. Collateral products might be purchased, or the buyer might return for later sales to the same source at a later time, and it is difficult to determine the value of those sales, all of which is captured in the concept of goodwill, damage to which is a harm that cannot easily be quantified. 
  4. The movant explained its great investment in developing the products based on the patent. This went unrebutted by the opponent (who could have explained how much it spent to develop its allegedly infringing product).