Does the COVID19 Crisis Warrant Relief from a Preliminary Injunction Related to Fire Engines?

Yes.

Pierce Manufacturing secured a preliminary injunction prohibiting E-One from selling its Metro 100 single rear axle quint.  That preliminary injunction prohibits E-One from selling the Metro 100 during the pendency of the patent infringement litigation Pierce Manufacturing is pursuing against E-One. 

Pierce Manufacturing accuses E-One of infringing 2 of its quint configuration patents: U.S. Patent 9,597,536 and 9,814,915.  (It appears from later pleadings that Pierce has dropped claims related to the '915 Patent). 

Trial had been scheduled for March 23, 2020, after the COVID19 pandemic had taken over in Florida and the U.S.  Pierce asked the court to delay trial by 60-days, but E-One would only agree if the injunction was modified.   The Court quickly set a telephonic hearing to address the motion.  During the hearing, the Court granted the motion to remove the case from a March 23, 2020 trial start, and ordered the parties to meet and confer to see if agreement could be reached on the injunction.  The Court gave the parties 20-days to see if they could reach a resolution.

The parties did not reach a full agreement, but got close.  Pierce didn't agree a modification was appropriate, but in the case the Court ruled otherwise, Pierce and E-One agreed to provide certain relief from the injunction from the time period essentially overlapping with what will be the COVID19-related delay of the trial.  Specifically, the parties agreed that E-One may sell the Metro 100 during this time period to fire departments.  The parties agreed that if the jury eventually determines that sales of the Metro 100 are infringing, these interim sales can be factored into a damages award.  The parties further agreed that nothing about permitting the interim sales during this COVID19 crisis could be used by the parties to argue there would be no irreparable harm in continued sales of the Metro 100.

The parties were unable to agree as to whether or not a future injunction could cover these interim sales.  The Court entered the modification to the preliminary injunction, and sided with E-One in holding that:

Any such Interim Sales, as defined by the receipt of a purchase order from a bona fide purchaser, shall not be subject to any future injunction, regardless of the outcome of the jury trial in the case.

Preliminary injunction modified.
[Notably, shortly after entering this modification, Judge Moody transferred this case to Judge Barber, with his consent.] 
Pierce Manufacturing, Inc. v. E-One, Inc., Case No. 8:18-CV-617-JSM-TGW (M.D. Fla. Apr. 8, 2020) (J. Moody)

Permanent Injunction For A Willful Copyright Infringer?

Nope.  Injunctions do not automatically flow after a finding of infringement, even where infringement is willful.  Yellow Pages Photos sued Ziplocal and Yellow Pages Group for unauthorized usage of YPP's photos.  YPP produces and licenses images for use in advertising.  Ziplocal was formerly a licensee of YPP and YPG created and produced advertisements for Ziplocal.

YPP prevailed at trial, convincing the jury that defendants had willfully infringed its copyrights.  Specifically, the jury awarded $100,001 against Ziplocal for breach of contract, willful copyright infringement of 123 works, and contributory copyright infringement of 123 works.  The jury also awarded $123,000 against YPG for willful copyright infringement of 123 works.  After the jury trial, YPP sought both prejudgment interest and a permanent injunction.

To obtain a permanent injunction, you must show: (1) irreparable harm; (2) damages do not adequately compensate you for the harm; (3) the balance of hardships justifies an injunction; and (4) the public interest is best served with an injunction.  Even though you've established willful infringement, you must still prove these four factors.  The problem for YPP was that it had testified that money was enough to compensate for its injury and that it hadn't made any new sales in years:

Looking at the factors of irreparable harm and inadequate remedy at law, the Court concludes that Plaintiff has not shown that it will likely suffer irreparable harm in the future such that the damages already awarded by the jury will not adequately compensate for any losses. At the time of trial, and according to its sealed financial records, Plaintiff had not secured new customers since 2009. As the income from Plaintiff's photos and licensing revenues declined, Plaintiff did not obtain new customers, although Plaintiff's principal continued to attempt to market the photos and entered into negotiations to sell licenses to no avail. Without a new market or income stream derived from photos or licenses for approximately five years, Plaintiff is unable to show that it would be irreparably harmed by loss of income.
 

In addition to the lack of irreparable harm, Plaintiff's principal's testimony supports a finding that damages provide an adequate remedy at law, thereby negating the necessity of entering permanent injunctive relief. Plaintiff's principal testified that a monetary award would compensate him for Plaintiff's losses in the market. The Court concludes that the jury's finding of willful infringement on the part of both Defendants and ensuing damage award, provides an adequate remedy at law for Plaintiff's losses.

The Court did, however, award prejudgement interest ($17k against Ziplocal and $22k against YPG).

Permanent Injunction denied; prejudgment interest granted.
Yellow Pages Photos, Inc. v. Ziplocal, LP, Case No. 8:12-cv-755 (M.D. Fla. June 18, 2014) (J. Lazzara)

Willful infringement alone does not get you enhanced damages

Harris sued FedEx for infringing a number of patents relating to systems for gathering flight performance data from aircraft for analysis. Generally, the technology provided for aircrafts to wirelessly transmit certain flight performance data to an airport based receiver. In prior systems, the data needed to be manually removed from the aircraft and delivered to the centralized storage area, or through some direct line-of-sight infrared link or fiber optic cable. Harris' patents protected a system for this data gathering which utilized wireless transmission of the flight data via a radio frequency link.

FedEx developed a system for gathering flight statistics on its B727 aircraft. This system wirelessly transmitted flight data from parked airplanes to one of FedEx's servers in Tennessee. This system was found to infringe Harris' patents. And the infringement was found to be willful. Harris sought enhanced damages, attorneys' fees, and an injunction.

Enhanced Damages

35 U.S.C. 284 allows a court to increase a patent infringement damage award by up to three times. A plaintiff must establish that the defendant's infringement was willful. Damages are enhanced in order to penalize an infringer for their increased culpability. A court should consider consider the following factors in deciding whether or not to enhance damages:

1. whether the infringer deliberately copied the ideas or design of another
2. whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed
3. the infringer's behavior as a party to the litigation
4. the defendant's size and financial condition
5. the closeness of the case
6. the duration of the defendant's misconduct
7. remedial action taken by the defendant
8. the defendant's motivation to harm; and
9. whether the defendant attempted to conceal its misconduct

The court analyzed each of these factors, finding 1, 3, 6, 8, and 9 weighed against enhancing damages, while 2 and 5 supported (the others were neutral). FedEx's defenses, even though they didn't succeed, weren't frivolous. FedEx had made a good faith effort to defend itself. In sum, FedEx's conduct was not to egregious as to warrant an award of enhanced damages.

Attorneys' Fees

In patent cases, the prevailing party may be awarded its attorneys' fees if the case is an "exceptional case." If a defendant is found to be a willful infringer, the case is presumed to be an exceptional case, and the court must explain why a case is not exceptional if the court is going to refuse an award of attorneys' fees. Here, the Court did not need to provide that explanation, because it found the case was exceptional and awarded Harris its reasonable attorneys' fees.

Permanent Injunction

It used to be (until 2006) that if you prevailed as a plaintiff in a patent infringement case, you were presumably entitled to an injunction. (That presumption could be rebutted, but the defendant had to do the rebutting). The Supreme Court changed this landscape with its eBay decision, throwing patent law back into the category of other harms -- if you wanted an injunction, you have to prove you're entitled to it. To prove that, a plaintiff must show:

1. it suffered irreparable harm
2. the remedies at law (i.e. money damages) are inadequate to compensate for that harm
3. the balance of hardships in granting an injunction favor the plaintiff; and
4. the public interest would not be disserved by entering an injunction

The court addressed each of these elements. Concerning irreparable harm, the court noted that a finding of past infringement, alone, does not show irreparable harm. But it does tend to suggest such harm. Here, FedEx argued in part that Harris also licensed its patents. Because of this, FedEx argued, Harris didn't suffer irreparable harm because it has shown that it is willing to license (i.e. accept money) the use of its technology. The court was not convinced by this argument. FedEx's use of its infringing system interfered with Harris' licensing opportunities. This interference was irreparable.

Regarding the second factor, FedEx's interference with Harris' licensing opportunities was not curable by money. As such, Harris was entitled to equitable relief. The final two factors also favored an injunction. So the Court ordered one be entered. The parties now have to submitted a proposed injunction for the Court to issue.

Conclusion

Just because a defendant is found to have willfully infringed a patent does not mean the plaintiff will necessarily get enhanced damages. Nor does it mean the plaintiff will get its attorneys fees (although the defendant has to convince the court to explain why attorneys's fees wouldn't be warranted against the willful infringer). And the right to an injunction depends on the existence of irreparable harm (and the other elements).

Harris v. FedEx, Case No. 6:07-cv-1819, slip op. (M.D. Fla. Feb. 28, 2011) (J. Antoon)

"Slight delay" in filing motion for permanent injunction is ok -- injunction granted

This case is interesting to me for a couple of reasons, but most obvious -- the inventor's name. Woodrow Woods. That first name is particularly impressive. Woodrow. Very distinguished sounding. I like it. I like it so much, in fact, that I am going to forgo formalities in this post and refer to the plaintiff as Woodrow. Really, the name is that good.

Woodrow invented certain marine exhaust system improvements which helped cool exhaust gas and prevented water infiltration, leading to less corrosion and engine failure in marine engines. He was awarded U.S. Patents 5,740,670 and 6,035,633 for these inventions.

Woodrow, along with his company Marine Exhaust Systems, sued his competitor DeAngelo Marine Exhaust for infringement. In April, a jury agreed with Woodrow that Deangelo wilfully infringed the patents, and awarded $92,804 in damages. Final judgment was entered on June 8, 2010. That same day, Woodrow moved the Court to amend the final judgment to include a permanent injunction.

DeAngelo argued it was too late -- Woodrow's request for a permanent injunction was made after judgment was entered, and more than 6 weeks after the trial concluded. The Court was not persuaded:

Although the court agrees that plaintiffs should have filed this motion earlier, plaintiffs’ slight delay in moving for injunctive relief does not warrant denying the motion as untimely, given that the “principal value” of the patents-in-suit is the “statutory right to exclude.” Honeywell Int'l, Inc. v. Universal Avionics Sys. Corp., 397 F.Supp.2d 537, 546 (D.Del. 2005). In addition, DeAngelo has not shown that consideration of the motion at this time would result in unfair prejudice. Thus, the court proceeds to analyze the merits of plaintiffs’ motion.

The Court then analyzed the merits of Woodrow's request and started with 35 U.S.C. § 283 (which states that district courts may grant injunctions) and the four-factor test described in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 explaining that Woodrow must prove:

(1) that [they have] 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[s] and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

The Court analyzed the factors and found they weigh in favor of Woodrow -- so injunction will be granted.

But they're not done yet. Woodrow asked for a pretty broad injunction, preventing DeAngelo from making and selling "any device that infringes either of" the 2 patents. DeAngelo objected, arguing that was too vague and overly broad -- Woodrow needs to identify some products that DeAngelo can't sell. The Court agreed.

Woodrow has now crafted a more narrowly tailored proposed injunction, prohibiting DeAngelo from making and selling

any marine exhaust system the jury found was infringing, and any marine exhaust system no more than colorably different therefrom, infringing claims 1, 9, or 13 of the '670 patent or claims 1 or 14 of the '633 patent.

DeAngelo again objects, offering this language instead, prohibiting DeAngelo from making and selling

any marine exhaust systems having a "water can" or "diffuser" fabricated or manufactured based on any of the following DeAngelo specifications: ...

We'll see what the Court does.

Thanks Docket Navigator for bringing this case to my attention.

Woods v. DeAngelo Marine Exhaust, Case No. 9:08-CV-81579-DTKH (S.D. Fla. June 30, 2010)

Microsoft's appeal brief in Microsoft Word injunction matter

Dennis Crouch at Patently-O has acquired and posted Microsoft's 101-page opening appellate brief in i4i v. Microsoft. Microsoft's argument reads as a who's who in many of patent law's latest major decisions, including

• KSR v. Teleflex -- obviousness of inventions
• Cardiac Pacemakers v. St. Jude Med -- 35 U.S.C. § 271(f) does not apply to method claims (although Microsoft argues in terms of § 271(c))
• In re Seagate -- willful infringement
• eBay v. MercExchange -- injunctions in patent cases

As you will recall, a Texas judge entered an injunction preventing Microsoft from selling versions of Word which can handle custom XML, and ordering Microsoft to pay $290 million in damages. Read my earlier posts here, here, and here.

Microsoft expressed its clear discontent with the proceedings below:

In patent cases, even more than most, the trial judge’s role as a gatekeeper is crucial. As gatekeeper, the judge must define the metes and bounds of a patent through claim construction and then ensure that the evidence presented by the parties’ numerous experts is both reliable and rooted in the facts of the case at hand. And after the jury has rendered its verdict, it is the judge who, before allowing that verdict to become an enforceable judgment, must ensure that the verdict is adequately supported by the evidence and supportable under the law. This gatekeeping function is especially important in patent cases because of the delicate balance struck by patent law to achieve its objective of promoting, rather than stifling, innovation. That balance can be lost if the district court does not protect the process, and patent litigation then becomes a tax on innovation rather than its guardian.

This case stands as a stark example of what can happen in a patent case when a judge abdicates those gatekeeping functions.

* * *

By the time the plaintiffs presented their damages case, the district court had abandoned even the semblance of gatekeeping. ...

* * *

At this point, if the district court had been more faithful to its role as gatekeeper, it should have recognized a trial run amok and interceded to prevent a miscarriage of justice ...

In sum, justice was denied, and the Constitution violated:

This is not justice. If district courts are free to admit theories of infringement that nullify a patent’s claim terms, specification, prosecution history, and title; if they will allow an inventor to validate his patent by testifying without corroboration that he lied about the date of conception; if they will not intercede to preclude manifestly unreliable—indeed, concededly manipulated—surveys of infringing use, or Georgia-Pacific analyses based on “benchmarks” bearing no rational relationship to the accused product, then patent litigation will be reduced to a free-for-all, unbounded by the requirements of the substantive law or the rules of evidence or trial procedure. While that mode of dispute resolution might enrich some plaintiffs and their investors, it hardly can be said to “promote the Progress of Science and the useful Arts.” U.S. Const. art. I, § 8.

Microsoft then presents a 5-pronged attack on the proceedings below:

1. Improper claim construction read a key limitation -- the word "distinct" out of the claims
2. The claims are invalid
3. Insufficient evidence to support indirect infringement finding
4. The $200 million damage award is not "reasonable"
5. Awarding an injunction here is improper

HP and Dell Amicus Briefs

HP and Dell also weighed in. HP and Dell both argued that enjoining sales of Word would impose large hardships, as both of these companies distribute Word. Both companies explained their process for creating images, which are then copied onto new computes. For those computers that include enjoined copies of Word (presumably this number is large, but the amicus briefs are redacted to protect this confidential information), HP and Dell would need to create and test new images, which would cost time and money.

We'll see how i4i responds....

Microsoft Word + custom XML = no more?

Tuesday, Judge Davis of the Eastern District of Texas entered a permanent injunction against Microsoft, enjoining the company from:

1. selling, offering to sell, and/or importing in or into the United States any Infringing and Future Word Products that have the capability of opening a .XML, .DOCX, or .DOCM file (“an XML file”) containing custom XML;

2. using any Infringing and Future Word Products to open an XML file containing custom XML;

3. instructing or encouraging anyone to use any Infringing and Future Word Products to open an XML file containing custom XML;

4. providing support or assistance to anyone that describes how to use any infringing and Future Word Products to open an XML file containing custom XML; and

5. testing, demonstrating, or marketing the ability of the Infringing and Future Word Products to open an XML file containing custom XML.

The Court also entered final judgment, with damages:

• $200 million for infringement
• $40 million for willful infringement
• ~$11.8 million for post-verdict damages
• ~$38 million in pre-judgment interest
• (for a total of ~$290 million)

i4i sued Microsoft for infringing U.S. Patent No. 5,787,449 directed to separately manipulating the architecture and content of a document. The '449 invention relied upon a "metacode map," which allowed a reliable method of manipulating the structure of a document without reference to its content. Claims 1-13 were found to be invalid for being indefinite under 35 U.S.C. § 112 ¶ 2.

Claim 14 provides:

14. A method for producing a first map of metacodes and their addresses of use in association with mapped content and stored in distinct map storage means, the method comprising:

providing the mapped content to mapped content storage means;

providing a menu of metacodes; and

compiling a map of the metacodes in the distinct storage means, by locating, detecting and addressing the metacodes; and

providing the document as the content of the document and the metacode map of the document.

Direct Infringement

Microsoft's offered 3 arguments that there was no direct infringement: (1) no evidence that Word created a "data structure," as required by the Court's construction of the term "metacode map;" (2) insufficient evidence that Word contained "metacodes;" and (3) improper construction of the terms "distinct map storage means," "mapped content storage means," and "mapped content storage." The Court was not persuaded by any of these arguments.

Indirect Infringement

Microsoft next argued that contributory and inducement infringement was also improper. The Court explained:

A cause of action for contributory infringement flows from 35 U.S.C. § 271(c). That section provides:

Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

35 U.S.C. § 271(c).

Induced infringement is a separate cause of action from contributory infringement. “In order to prevail on an inducement claim, the patentee must establish first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement.” ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1312 (Fed. Cir. 2007) (internal quotation marks omitted). “[I]nducement requires evidence of culpable conduct, directed to encouraging another's infringement, not merely that the

inducer had knowledge of the direct infringer's activities.” Id. at 1306. Furthermore, “[t]he plaintiff has the burden of showing that the alleged infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.” DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (quoting Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553 (Fed. Cir. 1990)).

Both forms of indirect infringement require the plaintiff to prove corresponding acts of direct infringement. See DSU Med. Corp., 471 F.3d at 1303. Importantly however, a patentee may prove both indirect infringement and the corresponding direct infringement by circumstantial evidence. See Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1219 (Fed. Cir. 2006). “There is no requirement that direct evidence be introduced, nor is a jury's preference for circumstantial evidence over direct evidence unreasonable per se.” Id. Moreover, “[t]he drawing of inferences, particularly in respect of an intent-implicating question . . . is peculiarly within the province of the fact finder that observed the witnesses.” Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1110 (Fed. Cir. 1986); see also Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368, 1378 (Fed. Cir. 2005) (declining to disturb jury's verdict because intent to induce infringement “is a factual determination particularly within the province of the trier of fact”).

Microsoft offered 3 arguments concerning contributory infringement: (1) insufficient evidence that Microsoft knew Word was "patented and infringing;" (2) insufficient evidence that Word did not have a substantial non-infringing use; and (3) the software couldn't form the basis of a contributory infringement claim because the only claims asserted were process claims. The Court was not persuaded by any of these arguments.

Willfulness

To prevail on a charge of willful infringement, the patentee must show the accused infringer acted with objective recklessness. In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). First, the patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions infringed a valid patent. Id. The accused infringer's state of mind is irrelevant to this objective inquiry. Id. If the patentee meets this threshold objective standard, the patentee must further demonstrate that the accused infringer knew or should have

known of this objectively high risk. Id. Whether infringement is willful is a question of fact and reviewed for substantial evidence. Metabolite Labs., Inc. v. Labs. Corp. of Am. Holdings, 370 F.3d 1354, 1359 (Fed. Cir. 2004).

Microsoft offered a number of arguments, none of which were convincing to the Court, including: (1) because the Court invalidated some claims of the '449 patent, Microsoft asserted defenses to the remaining claims, and i4i involuntarily dismissed some accused products, there was no willfulness; and (2) insufficient evidence of whether Microsoft knew of the likelihood of infringement.

The Court then addressed obviousness and anticipation, as well damages.

The Court's claim construction order (also granting partial summary judgment of invalidity) can be found here. Supplemental claim construction here.

The Court's 65-page memorandum and order can be found here. The permanent injunction can be found here. And the final judgment can be found here.

i4i Ltd. v. Microsoft Corp., Case No. 6:07-CV-00113-LED (E.D. Tex. Aug. 11, 2009).