Patent owners who prevail in court proving that a competitor infringes their patent are, at minimum, entitled to an award of monetary damages.[1] By law, those damages must be at least a reasonable royalty for the competitor’s use of the patented invention.[2] The patent owner may also be entitled to lost profits—the profits that they would have made if the competitor had not infringed.[3]
But as the old adage goes, money doesn’t always buy happiness. What if the patent owner, understandably, wants its competitor to actually stop using the invention? There’s a remedy for that—injunctive relief. Injunctive relief stems from the U.S. Patent Act, granting patent owners the “right to exclude others from making, using, offering for sale, or selling the patented invention.”[4]
To obtain permanent injunctive relief in court, the patent owner must do more than simply prove infringement or lost profits. This may seem counterintuitive in light of the Patent Act’s provision of the special “right to exclude.” But the United States’ highest court puts patent owners to task in fully exercising that right.[5] Whether a court will order the defendant to permanently stop infringing depends on the patent owner’s ability to prove that four factors are met, as discussed below.[6]
Factor 1 – Irreparable Harm
The patent owner must first prove that it is “irreparably harmed” by the defendant’s infringement.[7] Supporting evidence may include that: (1) the patent owner and defendant are direct competitors in the market; (2) the patent owner has lost market share and access to potential customers resulting from the defendant’s introduction of the infringing product; (3) the patent owner has had to lower its prices to compete due to the infringing product; or (4) the infringing product has caused the patent owner’s reputation and brand recognition to erode.[8]
Factor 2 – Inadequacy of Other Remedies at Law
The issues of irreparable harm and the adequacy of remedies at law are intertwined in that the patent owner must next prove that other remedies (particularly money damages) are inadequate to compensate for the harm caused by the defendant’s infringement.[9] This factor is commonly proved when the types of harm discussed above are difficult to quantify due to their variable or uncertain nature.[10] Quantifying the harm from a defendant’s infringement may be difficult when, for example, the patent owner’s loss of a single sale to the defendant has an effect on sales of the patent owner’s other related products (e.g., accessories). As another example, quantification may be difficult when customers purchasing the patented product from the patent owner tend to influence others (e.g., friends, family, or colleagues) to purchase the same product from the patent owner.[11] As a further example, harm may defy valuation when the patent owner has been forced to change its business strategy due to losses in market share caused by the defendant’s infringement.[12] The “inadequacy of other remedies” factor may also be proved when the defendant has insufficient funds to satisfy a money judgment, is likely to resist collection, and/or will likely continue to infringe unless ordered to stop.[13]
Factor 3 – Balance of Hardships
This third factor requires the patent owner to prove that the balance of hardships between the patent owner and the defendant favors an injunction and may be proved based on differences between the patent owner’s and defendant’s sizes, products, and revenue sources.[14] For example, the balance of hardships may favor an injunction where the patented technology is far more important to the patent owner than to the defendant. Perhaps the patented technology is central to the patent owner’s small business, whereas the defendant’s sale of the infringing product makes up only a small portion of its revenue across broad product classes.[15]
Factor 4 – Public Interest
The fourth and final factor requires the patent owner to prove that an injunction would not disserve the public’s interest. This “public interest” factor seeks to strike a balance between protecting the patent owner’s intellectual property rights and protecting the public from any adverse effects of the injunction.[16] For example, courts may find that an injunction does not disserve the public’s interest when it does not have a significant effect on customers of the defendant who already purchased the infringing product or applies only to the defendant’s future sales of the infringing product.[17] But this factor may be more difficult to prove if the infringing product is a life-saving one (e.g., drugs or medical devices).[18]
Conclusion
As this blog post intends to emphasize, proving patent infringement is only the first step to enforcing a patent in court. And while money damages may compensate for harm resulting from infringement, only an injunction can prevent future infringement. Injunctive relief is therefore a powerful remedy to protect market position and business value for patent owners who can meet this four-factor test.
[1] See 35 U.S.C. § 284.
[2] See id.
[3] Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1285 (Fed. Cir. 2017) (explaining that lost profits damages “are not easy to prove”).
[4] Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633, 638 (Fed. Cir. 2015) (citing 35 U.S.C. § 154(a)(1)).
[5] eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 390 (2006).
[6] This blog post discusses permanent injunctions awarded at the conclusion of the case after patent infringement is proven. In certain instances, preliminary injunctions may be available to patent owners early in a case before the parties have an opportunity to go to trial.
[7] See Apple Inc., 809 F.3d at 639.
[8] See Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1150–1155 (Fed. Cir. 2011);
Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 1344 (Fed. Cir. 2013).
[9] See ActiveVideo Networks, Inc., 694 F.3d 1312, 1337 (Fed. Cir. 2012);
Bio-Rad Labs., Inc. v. 10X Genomics Inc., 967 F.3d 1353, 1378 (Fed. Cir. 2020).
[10] See Apple Inc., 809 F.3d at 645.
[11] See id.
[12] See i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 862 (Fed. Cir. 2010).
[13] See Robert Bosch LLC, 659 F.3d at 1155.
[14] See Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1329 (Fed. Cir. 2008)
[15] See i4i Ltd. P’ship, 598 F.3d at 862.
[16] See Bio-Rad Labs., Inc., 967 F.3d at 1379.
[17] i4i Ltd. P’ship., 598 F.3d at 863.
[18] See Apple Inc., 809 F.3d at 647.



