An Injunction for an N.P.E.

Submitted by patentadmin on Thu, 03/24/2011 - 16:54

Once upon a time, a patentee that prevailed in an infringement suit was awarded a permanent injunction barring the scum-sucking, bottom-feeding defendant from committing further dastardly acts of infringement. Automatic; no questions asked. Then, the Supreme Court, in its infinite wisdom, handed down its eBay decision, under which a patentee which does not practice the patented invention – an N.P.E. or, depending upon your point of view, a Patent Troll – is simply not going to receive an injunction.

As might be imagined, this was an extremely serious blow to the non-practicing entities. Well, N.P.E.s rejoice. A recent case has created an exception to the otherwise draconian rule. (Harris Corporation v. Federal Express Corporation)

Harris sued Fed Ex, alleging infringement of several patents directed to the use of spread spectrum communications signals for the transmission of flight performance data from a parked aircraft. A jury returned a verdict in favor of Harris, finding all of the asserted patent claims to be valid and infringed and further finding that the infringement was willful.

After a thorough analysis – 10 pages of the Order – the Court decided that “enhanced” damages were not warranted. No double or treble damages. The Court did decide, however, that the case was “exceptional” – 3 pages of the Order – and awarded Harris its attorneys’ fees.

That brings us to the question of a permanent injunction. Not surprisingly, Fed Ex argued that a permanent injunction was inappropriate, in part because “the parties are not competitors.” Moreover, Harris was not practicing the patented invention. It did, however, license the patents-in-suit to various licensees which did manufacture and sell systems embodying the patented inventions. Additionally, Harris had pursued a number of different commercial activities with respect to the patents-in-suit, including endeavoring to manufacture systems embodying the patented inventions, soliciting purchase offers for the patents, granting licenses to some entities, and declining to license others.

The judge, possibly feeling bad after denying Harris any enhancement of its damages, GRANTED the injunction. “While Harris and Fed Ex are not direct competitors, the record establishes that Fed Ex’s Infringing Systems are in direct competition with Harris’ licensees and that Fed Ex’s use of the infringing products interferes with Harris’ licensing opportunities … the Court finds the present case to be factually distinguishable from those cases where a patentee routinely grants boilerplate licenses to any interested parties … despite Harris’ apparent willingness to license the Patents-In-Suit, Harris has not entered into boilerplate license agreements with any interested party and has in fact declined to enter into certain licensing agreements involving the Patents-In-Suit.”

So, non-practicing entities, there may be some hope for an injunction after all.

THE LESSON TO BE LEARNED: An N.P.E. wishing to keep alive the threat of a permanent injunction, in any future litigation, should NOT offer a boilerplate license to any entity requesting one.

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