« Frivolous | Main | Consequence of Silence »

December 1, 2008

Whaling

Two recent Supreme Court cases affirming the power of the police state, unrelated to the mercantile motives of patents, nonetheless toll the death knell for the "substantial question of patentability" defense in fighting a patent-holder's motion for a preliminary injunction. Judge Newman, in a 2-1 decision in Abbott v. Sandoz last month, read the tea leaves, leaving dissenting Judge Gajarsa wagging a worthless finger.

The U.S. Navy gives no thought to deafening and destroying the lives of whales and other marine mammals with its sonar blasts during training exercises. In Winter v. Natural Resources Defense Council, decided November 12, the Supreme Court also gave it no thought. Instead, the Court emphasized the traditional four-factor test in determining the merit of a preliminary injunction: 1) a plaintiff's likelihood of success, 2) the "possibility" of irreparable harm, as opposed to "likelihood," 3) the balance of hardship between the parties, and 4) the public interest.

Winter repeatedly pointed to the SCOTUS June ruling in Munaf v. Green, overturning a bar preventing turning over an American citizen arrested as being insurgent over to the Iraqi government, so they could torture him in their own fashion.

In both cases, the Supreme Court focused on the four-factor figuring. While Winter delved into irreparable harm (not to the whales, mind you, but the sensitive Navy), Munaf went to the likelihood of success on the merits.

In Abbott, Judge Gajarsa accused the panel majority of ignoring many years of Federal Circus precedent, that a preliminary injunction in a patent case should not issue if a defendant can blow enough smoke on invalidity or non-infringement.

Judge Newman set Judge Garjarsa straight with a perspective validated in both Winter and Munaf -

The dissent states that the district court applied the incorrect standard, and that if the infringer "raises a substantial question concerning either infringement or validity," diss. op. at 2, it is an abuse of discretion to enjoin infringement pendente lite. The dissent quotes with approval a past panel statement that "In resisting a preliminary injunction, however, one need not make out a case of actual validity. Vulnerability is the issue at the preliminary injunction stages, while validity is the issue at trial." Id. Indeed, this court's precedent makes this statement, in direct conflict with other, earlier statements that the standard is not vulnerability, but likelihood of success on the merits.

The criteria relied on in the dissent are not the criteria of any other circuit, nor of the Supreme Court. The correct standard is not whether a substantial question has been raised, but whether the patentee is likely to succeed on the merits, upon application of the standards of proof that will prevail at trial. The question is not whether the patent is vulnerable; the question is who is likely to prevail in the end, considered with equitable factors that relate to whether the status quo should or should not be preserved while the trial is ongoing. The presentation of sufficient evidence to show the likelihood of prevailing on the merits is quite different from the presentation of substantial evidence to show vulnerability.

Thus the evidence that favors the patent must be considered in deciding a motion for a preliminary injunction, as well as the evidence against the patent. The trial court then decides which side is likely ultimately to prevail. The dissent presents only the case against the patent, apparently on the theory that this is all that is needed to raise a "substantial question".

Indeed, a showing of a substantial question concerning validity or infringement can serve to avert judgment on the pleadings, or to avoid the grant of summary judgment, but it is not the same as showing likelihood of eventual success on the merits. The dissent recognizes that it is not the same and that it "requires less proof", but errs in stating that this is sufficient to defeat the grant of a preliminary injunction. Precedent is clear that the standard is the likelihood of success of the plaintiff at trial, with recognition of the presumptions and burdens. See, e.g., Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367, 1370 (Fed.Cir.2005); Ranbaxy Pharmaceuticals., Inc. v. Apotex, Inc., 350 F.3d 1235, 1239 (Fed.Cir.2003); Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed. Cir. 1994); Smith Int'l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1579 (Fed.Cir.1983).

Supreme Court precedent is clear in stating that the same burdens and standards of proof apply in deciding the merits for preliminary injunction purposes, as in deciding the same questions upon full litigation. See, e.g., Gonzales, 546 U.S. at 429 (placing the burdens of proof for showing likelihood of success at the preliminary injunction stage). The Court explained in Amoco Production Co. v. Village of Gambell, AK, 480 U.S. 531, 546 n.2 (1987) that: "The standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success."

There is no reason why patent cases require unique treatment. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388. 394 (2006) ("[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.").

The combined signal from Munaf, Abbott and Winter mark a shift from the injunction chill of eBay, and earlier repeated statements from the Supreme Court that patent preliminary injunctive relief is an extraordinary remedy requiring a clear showing.

Posted by Patent Hawk at December 1, 2008 1:23 AM | Injunction

Comments

Post a comment




Remember Me?

(you may use HTML tags for style)