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Non-Practicing Licensor Denied Preliminary Injuction

By William F. Heinze

In Voda v. Cordis Corp., the Federal Circuit affirmed denial of a request for a preliminary injunction where the non-practicing licensor's failed to identify irreparable injury to himself due to Cordis?s infringement also failed to show that monetary damages are inadequate to compensate for Cordis?s infringement. According to the opinion by Circuit Judge Gajarsa,

In eBay Inc. v. MercExchange, L.L.C., the Supreme Court held that a plaintiff seeking a permanent injunction in a patent case must demonstrate:

1. that it has suffered an irreparable injury;
   
2. that remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
   
3. that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
   
4. that the publicinterest would not be disserved by a permanent injunction.
   

In this case, the district court found that Voda had not identified any irreparable
injury to himself due to Cordis?s infringement of his patents and also failed to show that monetary damages are inadequate to compensate for Cordis?s infringement. The
district court explained that Voda had attempted to prove irreparable injury by alleging irreparable harm to his exclusive licensee, rather than himself.

Voda argues that the district court erred in adopting a categorical rule that precludes a patent owner from proving its entitlement to an injunction by showing irreparable harm to its exclusive licensee. Specifically, Voda argues that such a categorical rule conflicts with eBay. In eBay, the Court explained that: "[S]ome patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do so. To the extent that the District Court adopted such a categorical rule, then, its analysis cannot be squared with the principles of equity adopted by Congress." eBay at 393.

We disagree with Voda that the denial of a permanent injunction in this case conflicts with eBay. The Supreme Court held only that patent owners that license their patents rather than practice them ?may be able to satisfy the traditional four-factor test? for a permanent injunction. Id. (emphasis added). Nothing in eBay eliminates the requirement that the party seeking a permanent injunction must show that ?it has suffered an irreparable injury.? Id. (emphasis added). Moreover, we conclude that the district court did not clearly err in finding that Voda failed to show that Cordis?s infringement caused him irreparable injury. In addition, we find that the district court did not clearly err or abuse its discretion in finding that monetary damages were adequate to compensate Voda. Accordingly, we affirm the district court?s denial of Voda?s request for a permanent injunction.

Full post as published by I/P Updates on August 19, 2008 (boomark / email).