DC denial of Thales’ motion to enjoin Philips’ ITC exclusion order as Thales did not show it was likely to suffer irreparable harm affirmed

Koninklijke Philips N.V. et al. v. Thales DIS AIS USA LLC, et al.

Docket No. 2021-2106 (https://cafc.uscourts.gov/opinions-orders/21-2106.OPINION.7-13-2022_1977322.pdf)


July 13, 2022

Brief Summary:   DC denial of Thales motion to enjoin Philips from seeking ITC exclusion order affirmed as Thales “failed to show it is likely to suffer irreparable harm”. Summary:  Thales appealed DC denial of Koninklijke Philips’ (Philips’) motion for a preliminary injunction enjoining Philips from seeking an exclusion order from the ITC.  The parties design and manufacture wireless communications equipment and had “been engaged in negotiations over what Philips asserts are standard essential patents (SEPs) that Thales has implemented according to European Telecommunications Standards Institute (ETSI) specifications” and, after failing to reach “an agreed upon fair, reasonable, and nondiscriminatory (FRAND) license for the SEPs”, Philips filed an infringement and declaratory injunction against Thales and an ITC action seeking an exclusion order.  Thales counterclaimed for breach of contract, a DJ claim for a FRAND rate determination, and moved for a preliminary injunction barring Philips from pursuing its ITC action which was denied by the DC.  The FC panel reviewed the DC’s denial for an abuse of discretion (Novo Nordisk, FC 1996), explaining that to obtain a PI, “a party must establish ‘that [it] is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the public interest’”, and that “[t]he mere possibility or speculation of harm is insufficient” (Luminara, FC 2016).  Thales argued the DC “erred in concluding that Thales failed to show it is likely to suffer irreparable harm from Philips’ ITC action” but the FC panel disagreed.  The FC panel wrote that Thales only showed “[e]vidence of speculative harms, such as customers merely expressing concern that a potential future ITC exclusion order could affect Thales’ ability to deliver products down the road” which “is insufficient to show a likelihood of irreparable harm” (Ferring, FC 2014; Takeda, FC 2020; CellzDirect, FC 2012).  The FC panel concluded Thales’ evidence “was conclusory” and did not establish “likely irreparable harm” (e.g., lost customers, delayed customer purchases, or struggle to acquire new business due to the ITC proceedings).  The DC decision was therefore affirmed.

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