Key Takeaway: The U.S. Patent and Trademark Office doubles down on its current pro-patentee stance by filing a statement of interest in district court, arguing that permanent injunctions should be available to non-practicing entities. Although the PTO’s statement is not likely to lead to a sea change in the way courts treat injunction requests from NPEs, practitioners should be mindful that the PTO’s patent-friendly posture has extended into the enforcement realm.
It has been 20 years since the Supreme Court held in eBay v. Mercexchange that a patentee seeking a permanent injunction must demonstrate both irreparable harm and the absence of an adequate remedy at law. During this time, courts have routinely held that non-practicing entities (“NPEs”), by virtue of their failure to commercially practice the asserted patents, can show neither irreparable harm nor the inadequacy of monetary damages. The PTO, however, recently filed a joint statement of interest with the DOJ challenging these holdings and seeking to open the door to injunctive relief for NPEs.
The joint statement was filed in Collision Communications, Inc. v. Samsung Electronics Co., where Judge Gilstrap is considering whether to grant a permanent injunction to Collision, an NPE who was awarded a $445.5 million verdict for willful infringement. In the statement, the PTO argued that an NPE could show both irreparable harm and no adequate remedy at law if it could demonstrate that its patent is difficult to value and its infringement damages are difficult to calculate. A press release from the PTO described the impetus for the joint statement: “Non-practicing patentees should not be categorically denied the opportunity for injunctive relief….”
While the PTO has rarely joined statements of interest in the last two decades, the statement in Collision marks the third joint statement the PTO filed with the DOJ in just the last year. Each of these three joint statements has argued for injunctive relief in either district courts or the ITC, with both district-court statements focusing on NPEs in particular. The three joint statements also come on the heels of the PTO’s marked increase in discretionary denials and marked decrease in institutions of petitions at the PTAB. Taken together, the message appears clear: the PTO wants patent rights intact and wants enforcement, even for NPEs, broad.
Despite the clarity of the PTO’s posture, however, its joint statements are unlikely to change how courts approach the irreparable-harm and inadequate-remedy-at-law inquiries for NPEs. For one, the PTO’s argument that an NPE lacks an adequate remedy at law due to the patent’s uncertain value came without any citation to Federal Circuit authority, or even a citation to a patent infringement case. Moreover, the PTO’s only authority for its other proposition—i.e., that “the difficulty in calculating monetary damages” may support a finding of irreparable harm—all involved plaintiffs who, unliked NPEs, competed with their infringers in the marketplace. Even Broadcom v. Qualcomm—which the PTO argued granted a permanent injunction to an NPE—involved two parties who “compete in the market for chipsets,” 543 F.3d 683, 686 (Fed. Cir. 2008), even if Broadcom did not “currently practice the claimed inventions,” id. at 703. As one author put it, the irreparable-harm requirement “appears to be the main stumbling block” for NPEs, “as they rarely can demonstrate the type of competition-related harm that qualifies as an irreparable injury under existing precedent.” Christopher B. Seaman, Permanent Injunctions in Patent Litigation After Ebay: An Empirical Study, 101 Iowa L. Rev. 1949, 2002 (2016).
Practitioners should nevertheless watch for Judge Gilstrap’s treatment of the joint statement. Any response to the PTO’s arguments—sympathetic or otherwise—will be informative not only of the status of the law of injunctions as applied to NPEs but also of the value (if any) a direct statement from the PTO has in patent litigation.
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