US judge questions illegality of seeking an injunction

27.03.2014

Following on from Osman’s recent post ‘The FRAND debate: is the tide turning?’ see here, FTC Commissioner Wright’s viewpoint has recently been echoed by Paul Michel, a former chief judge of the U.S.’s top patent court (the U.S. Court of Appeals for the Federal Circuit). He questioned at a U.S. conference earlier this week how it could possibly be illegal merely to seek an injunction (whether for an SEP or non-SEP). Michel has spoken out previously against restricting the ability of patent holders to enforce their patents (in the context of the U.S. anti-troll legislation currently underfoot) asserting that such developments will weaken the patent system, not strengthen it.
I agree with Osman that it is odd that such comments are being made on the other side of the Atlantic so late in the day. Many in Europe have been making similar statements since the EU Commission opened its investigation into Samsung in January 2012. For example, in mid-2013 Sir Robin Jacob, a former judge of the Court of Appeal of England and Wales, speaking at a UK conference equated the EU Commission’s current enforcement activities to ‘standing outside a court door with a gun threatening people who want to go inside’ suggesting that the Commission ‘is saying it is above and better than the courts’.
When engaging in this debate, it is important to remember that national courts often deny injunctions for patents that have been found to be valid and infringed. The U.S. Supreme Court’s eBay v MercExchange judgment sets out a four factor test for deciding whether to grant a permanent injunction in (all) U.S. patent cases. The judgment makes clear that an injunction is not an automatic right for a patent holder upon establishment of validity and infringement but that in determining whether to grant a permanent injunction, a court should adhere to “well established principles of equity”. In the UK, it is also well established that injunctions are equitable remedies the grant of which is at the discretion of the court. For example, in July 2011, the English court denied IPCom an injunction for an SEP upheld as valid and infringed by Nokia pending determination of Nokia’s outstanding FRAND defences. Injunctions are also often denied even in the case of non-SEPs. For example, the English court recently stayed an injunction in the Nokia v HTC proceedings (see my previous post here) and US Judge Lucy Koh of the U.S. District Court for the Northern District of California has recently denied Apple an injunction for a non-SEP on the basis that there is no “requisite causal nexus” between Samsung’s infringement and Apple’s claimed irreparable harm (irreparable harm is one of the eBay factors). This legal landscape underpins the comments made by Paul Michel and Sir Robin Jacob, both retired judges, who apparently object to the proposition that parties can be prevented from seeking an injunction without giving the court the opportunity to assess the facts and exercise its discretion (and that the seeking of an injunction in such circumstances can be abusive).
These latest comments by Michel and FTC Commissioner Wright are unlikely to cause the EU Commission to deviate from its chosen paths as against Samsung and Motorola in its investigations into both companies’ enforcement of their SEPs in Europe, nor indeed for the FTC to amend its settlements with Google and Bosch, both of which impose limitations on the circumstances in which injunctions can be sought. However, the more that these types of comments are forthcoming, the less likely perhaps it seems that an industry-wide initiative significantly limiting the seeking of injunctions for SEPs will arise… All eyes will be on ETSI when it meets again on 14 – 16 May 2014 to continue discussions on this topic