• Federal Circuit Removes Presumption of Irreparable Harm in Seeking Injunctive Relief
  • October 26, 2011 | Authors: James Moore Bollinger; Daniel A. Ladow; Jeffrey C. Morgan; Matthew C. Osborne; Douglas "Doug" D. Salyers
  • Law Firms: Troutman Sanders LLP - New York Office ; Troutman Sanders LLP - Atlanta Office ; Troutman Sanders LLP - Richmond Office ; Troutman Sanders LLP - Atlanta Office
  • In Robert Bosch LLC v. Pylon Mfg. Corp. , an important case addressing whether an infringer can be enjoined from future infringement, the U.S. Court of Appeals for the Federal Circuit has held that there is no presumption of irreparable harm when considering injunctive relief after a finding of infringement.

    In Bosch, the defendant Pylon was found to infringe patents related to Bosch’s automotive wiper blade technology. Bosch (the patent owner) moved for a permanent injunction against Pylon. The district court refused to enjoin Pylon, finding that Bosch was not being irreparably harmed. Bosch appealed to the Federal Circuit, which reversed the district court and granted the permanent injunction.

    Traditionally, patent holders hoping to halt the activities of infringers have relied on a presumption of irreparable harm in order to meet the test for injunctive relief. The presumption has been a tool for patentees seeking both preliminary and post-judgment injunctions against competitors, but has been met with skepticism and debate following eBay Inc. v. MercExchange, L.L.C.  In eBay, the Supreme Court unanimously held that an injunction should not automatically issue upon a ruling of patent infringement, but instead should depend on the application of the traditional four factor test for such equitable relief, including a showing of irreparable harm.

    In Bosch, the Federal Circuit was quick to note the death of the presumption of irreparable harm, specifically stating “we take this opportunity to put the question to rest and confirm that eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.” While this can be read as a broad statement of this panel’s view of the law, the case itself did not present the question of whether this holding also applies in preliminary injunction determinations, and the Court refrained from explicitly addressing that issue.

    Patent owners, however, should not feel as though the tide has completely shifted, as the Court made it clear that this holding “does not swing the pendulum in the opposite direction.” Instead, Bosch teaches the importance and weight of a patent as a property right granting its owner a right to exclude others. Specifically, the Court stated, “while the patentee’s right to exclude alone cannot justify an injunction, it should not be ignored either.”

    In reversing the district court, and granting a permanent injunction on behalf of Bosch, the Federal Circuit focused more on the specific failures of the district court in conducting its analysis of whether permanent injunctive relief was warranted, instead of elaborating on how the property rights of a patent affect the analysis of irreparable harm. Specifically, the Federal Circuit faulted the district court’s analysis and conclusions which emphasized the presence of additional competitors in the marketplace beyond Pylon and “the non-core nature of Bosch’s wiper blade business,” both of which the district court found to cut against a finding of irreparable harm.

    The Federal Circuit noted that while evidence of a “two-player market” has substantial weight in favor of an injunction, “the converse is not automatically true,” observing that in fact: “The record reveals that Bosch has diligently pursued infringers since the time it first learned of Pylon’s infringing beam blades.” The Federal Circuit also stated that since non-core businesses are susceptible of suffering irreparable injury, the fact that the business unit involved is a non-core business should not be viewed as necessarily weighing against injunctive relief.

    While acknowledging that the district court had cited various cases in support of its analysis, the Federal Circuit pointedly noted that: “The trial court’s error in relying on these cases again arises from its conclusion that, if a fact supports the granting of an injunction, its absence likely compels denial of one. That is not the law, however.”

    In the wake of the Supreme Court’s decision in eBay, the Federal Circuit’s decision in Bosch has clarified that a presumption of irreparable harm cannot be applied in determining whether to impose permanent injunctive relief. The Federal Circuit has now refocused the analysis on providing the proper recognition in a given case to the status of the patent as a property right granting its owner the right to exclude. But just how this new emphasis and the disappearance of the presumption of irreparable harm will play out in future cases remains to be seen and no doubt subject to debate.