Docket No. 2017-1148
LOURIE, TARANTO, CHEN
July 10, 2017
Brief summary: DC denial of preliminary injunction vacated and remanded as it was not clear it applied the appropriate standards regarding the “‘causal nexus’ between the infringing features of the infringer’s products and the sales lost to the patentee” (“‘some connection’ between the patented features and the demand for the infringing products”).
Summary: Genband appealed DC denial of its request for a permanent injunction (PI) because “Genband had not established irreparable harm from the infringing activities” following the jury finding that Metaswitch infringed the claims and that those claims are not invalid (awarding over $8 million in damages). The patents at issue relate to voice-communications services over Internet Protocol networks (“voice over IP” or “VoIP”). The DC denied Genband’s request for PI because: 1) “Genband did not demonstrate a causal nexus between the alleged irreparable harm (based on lost sales) and the presence of the infringing features in Metaswitch’s infringing products”; and, 2) “although Genband did not unreasonably delay in suing Metaswitch for infringement, it did delay in suing for several years”, weighing against irreparable harm. The FC panel opinion explained that a DC grant or denial of an injunction is reviewed for abuse of discretion (Ecolab, FC 2009 (“clear error in judgment in weighing relevant factors”); Cooter, US 1990 / Highmark, US 2014 (“erroneous view of the law or…clearly erroneous assessment of the evidence”)). It also explained that “[i]n this case, the sole basis for denial of the requested injunction” was that “Genband did not show irreparable injury…, one precondition to issuing the requested injunction” (eBay, US 2006). The DC held that Genband did not show “‘some causal nexus’ between the infringing features of the infringer’s products and the sales lost to the patentee” (Apple I, FC 2012; Apple II, FC 2012; Apple III, FC 2015; Apple IV, FC 2015). The FC panel found the that the DC’s “opinion, however, leaves us uncertain whether the court relied on too stringent an interpretation of the causal-nexus requirement” by requiring Genband “to prove that ‘the patented features drive demand for the product”. It explained that “Genband specifically invoked the standards laid out in Apple III (“proving a causal nexus requires the patentee to show ‘some connection’ between the patented features and the demand for the infringing products”) and Apple IV (“causal-nexus requirement ‘just means that the must be proof that infringement causes the harm’ that the patentee alleges is irreparable”) but it saw “no sufficient basis for inferring the [DC] actually used those standards”. The FC panel therefore vacated and remanded the DC’s decision for reconsideration on this point (it also found the issue of Genband’s litigation delay “call[s] for an evidentiary judgment”).