Patent Law

Nailed

By Gary Odom and Jordan Kuhn

Acumed sued Stryker over 5,472,444, which claims an orthopedic nail for mending the upper arm bone. Acumed got a permanent injunction, which was trashed by the CAFC in the wake of eBay's strict four-factor metric. On remand, same result: permanent injunction. On appeal, the district court skated: found within its discretion. Tip for district court judges: it's not how you rule, but how you nail it.

Acumed v. Stryker (CAFC 2008-1124)

An injunction was permissible even though Acumed had licensed the patent before.

Contrary to Stryker's argument that the district court assigned no weight to the two licenses granted by Acumed, the court considered the previous licenses and distinguished them, albeit briefly, from the circumstances of this case.

The essential attribute of a patent grant is that it provides a right to exclude competitors from infringing the patent. 35 U.S.C. § 154(a)(1) (2000). In view of that right, infringement may cause a patentee irreparable harm not remediable by a reasonable royalty. While the fact that a patentee has previously chosen to license the patent may indicate that a reasonable royalty does compensate for an infringement, that is but one factor for the district court to consider. The fact of the grant of previous licenses, the identity of the past licensees, the experience in the market since the licenses were granted, and the identity of the new infringer all may affect the district court's discretionary decision concerning whether a reasonable royalty from an infringer constitutes damages adequate to compensate for the infringement. The district court here weighed these factors and determined, consistent with eBay, that money damages constituted adequate compensation only for Stryker's past infringement and that no adequate remedy at law existed for Stryker's future infringement.

Absent clear error of judgment, which is not evident here, the weight accorded to the prior licenses falls squarely within the discretion of the court. A plaintiff's past willingness to license its patent is not sufficient per se to establish lack of irreparable harm if a new infringer were licensed. See eBay, 547 U.S. at 393 (rejecting the district court's conclusion that "a plaintiff's willingness to license its patents and its lack of commercial activity in practicing the patents would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue") (quotations omitted); see also Smith & Nephew, 466 F. Supp. 2d at 983 (quoting eBay). Adding a new competitor to the market may create an irreparable harm that the prior licenses did not. In this case, the fact that Acumed licensed the '444 patent under two particular sets of circumstances does not mean that the district court abused its discretion in not holding that Acumed must now grant a further license to Stryker and receive only a royalty as compensation.*

The CAFC panel felt too emasculated to carve sturdy case law. This opinion was a one-off.

*We decline to consider whether it would be appropriate under other circumstances to deny injunctive relief because the patentee had licensed the patented technology to other competitors. We simply note that the district court did not abuse its discretion here....

Oregon district court Judge Anna J. Brown had smartly tossed into her opinion salad TiVo, Visto, and Smith & Nephew, post-eBay injunction getters. And she had ticked off analysis of the four factors: 1) irreparable harm; 2) lack of adequate remedy at law; 3) balance of hardships; 4) public interest.

The CAFC repeatedly sang the chorus: "the district court did not abuse its discretion," along with the lyric: "Again, the weight given to particular evidence falls well within the discretion of the court."

Affirmed.

Full post as published by The Patent Prospector on January 01, 2009 (boomark / email).