• Obtaining A Post-eBay Permanent Injunction Against Patent Infringement
  • February 23, 2007 | Author: Glenn W. Trost
  • Law Firm: White & Case - Los Angeles Office
  • In its May 2006 decision in eBay v. MercExchange, the United States Supreme Court made it more difficult for patent owners to get injunctions against patent infringement. Nevertheless, a recent ruling in favor of White & Case client and semiconductor manufacturer International Rectifier Corporation ("IR") shows that infringers can still be kept at bay.

    In eBay, the Supreme Court abolished the presumption that a patent owner who proves infringement has been harmed and thus (absent extraordinary circumstances) has earned the right to an injunction prohibiting further infringement. Under the new standard, a patent owner who prevails at trial must now also prove that it has suffered irreparable harm. While this new rule is likely aimed at so-called "patent trolls" — patent owners whose only business is asserting claims for patent infringement — it applies equally to all patent holders, including companies (like IR) that obtain patents to protect the technology they use to make their products.

    Prior to the Supreme Court's opinion in eBay, IR had prevailed in a patent-infringement trial against defendant IXYS Corporation when a jury found that IXYS's entire product line in question infringed one of IR's patents. Although the jury awarded IR $6.24 million in damages for past infringement, the verdict did not itself force the defendant to stop selling the infringing products. To obtain that relief, IR would have to convince the trial judge to issue an injunction against further infringement.

    Although under the pre-eBay standard, IR was presumptively entitled to an injunction, IR also introduced evidence about the effects of the infringing products on the marketplace, the harm to IR and its licensees resulting from sales of products using patented technology without permission, and the difficulty of putting a dollar amount on the damage caused. For example, IR introduced evidence that a customer buying a product covered by the asserted patent is more likely to buy another product from the same manufacturer, even if that product is not covered by the patent. In this way, IR proved that its damages exceeded the profits lost to infringing sales, and that it was virtually impossible to calculate the full extent of IR's monetary damages. Based on this evidence, the trial judge, The Honorable Manuel L. Real of the United States District in Los Angeles, issued a permanent injunction barring IXYS from selling its infringing products.

    On January 17, 2007, the United States Court of Appeals for the Federal Circuit denied IXYS's motion for a stay of that permanent injunction during the appeal, ruling that IXYS was unlikely to overcome the jury's infringement verdicts. This is one of the first appellate decisions involving a permanent injunction against patent infringement following the Supreme Court's eBay decision and is good news for patentees litigating in the post-eBay era.