Enjoining the Red Rider and his Elves – A Christmas Story Injunctions in Intellectual Property Cases 1

STATUTORY AUTHORIZATION 35 U.S.C. § 283 provides that: “The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” (emphasis added) 2

Injunctions at the Federal Circuit (Pre-2006) The Federal Circuit had, prior to 2006, presumed irreparable harm where “a clear showing ha[d] been made of patent validity and infringement.” H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed.Cir. 1987). Thus, it was “the general rule that an injunction will issue when infringement has been adjudged, absent a sound reason for denying it.” W.L. Gore & Associates, Inc. v. Garlock, Inc., 842 F.2d 1275, 1281 (Fed.Cir. 1988). See, e.g., Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1247 (Fed. Cir. 1989) (affirming the presumption of irreparable harm and noting that when infringement has been found, an injunction will issue absent extraordinary circumstances) 3

eBay Inc. v. MercExchange LLC 547 U.S. 388, 391 (2006) In 2006, the U.S. Supreme Court unanimously determined that an injunction should not be automatically issued upon a finding of patent infringement. eBay eliminated the presumption of irreparable injury, holding that the patent statute's language regarding the "principles of equity" required a full consideration of all four factors traditionally considered by courts of equity. The court did not explicitly determine whether eBay applies to other intellectual property injunction cases. 4

Four Factors the Plaintiff Must Prove Under eBay: (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 public interest would not be disserved by an injunction. 5

District Court Injunction Rates See Colleen v. Chien & Mark A. Lemley, Patent Holdup, the ITC, and the Public Interest, 98 CORNELL L. REV. 1, 9 (2012) (analyzing over 200 decisions between 2006 and 2011). 6

Daisy is about to file a complaint against Santa Claus: Patent infringement – patented BB rifle barrel Trademark infringement – Santa is passing off his “Red Rider” BB guns, infringing Daisy’s famous Red Ryder mark Misappropriation of trade secrets – secret method to make BBs that won’t shoot your eye out. 7

8 Targeting Santa

Under What Authority May A Court Sanction a Party for Filing a Baseless Pleading? (a) Fed. R. Civ. P. 11(c) (b) Inherent power of the Court (c) 28 U.S.C. § 1927 (e) All of the Above 9

Under What Authority May A Court Sanction a Party for Filing a Baseless Pleading? (a) Fed. R. Civ. P. 11(c) (b) Inherent power of the Court (c) 28 U.S.C. § 1927 (e) All of the Above 10

Which is not a factor in the court’s determination of an appropriate sanction under Rule 11? (a) Whether the conduct was unreasonable (b) Whether the conduct infected the entire pleading, or only one particular count or defense (c) Whether the person responsible was a lawyer (e) The amount, given the financial resources of the responsible person, needed to deter that person from repetition in the same case 11

Which is not a factor in the court’s determination of an appropriate sanction under Rule 11? (a) Whether the conduct was unreasonable (b) Whether the conduct infected the entire pleading, or only one particular count or defense (c) Whether the person responsible was a lawyer (e) The amount, given the financial resources of the responsible person, needed to deter that person from repetition in the same case 12

Which is not an appropriate sanction available to the court? (a) Dismissal without prejudice (b) Payment of a penalty to the court (c) Order requiring attorneys to attend seminars (e) Payment of opposing party’s attorneys’ fees 13

Which is not an appropriate sanction available to the court? (a) Dismissal without prejudice (b) Payment of a penalty to the court (c) Order requiring attorneys to attend seminars (e) Payment of opposing party’s attorneys’ fees 14

In the movie “A Christmas Story,” what special delivery material arrives in a package marked FRA-GI-LE? 15

With the aid of new counsel, Daisy has sued Santa Claus again alleging patent infringement, trademark infringement, and misappropriation of trade secrets as before. This time, counsel did not include any unsupported assertions that the elves were using the trade secret. 16

17 Re-targeting Santa

Did the Clerk Git ’er Right – Can the Plaintiff Get an Injunction without Pleading Use? 18

(1) Federal Circuit applies state law to substantive issues; and (2) In Texas, the movant need not show use of the trade secret; the threat that the trade secret may be used is sufficient. Did the Clerk Git ’er Right – YES 19 Core Labs. LP v. Spectrum Tracer Servs., L.L.C., No , 2013 WL (Fed. Cir. Aug. 7, 2013)  “Under Texas law, ‘[w]hen a defendant possesses trade secrets and is in a position to use them, harm to the trade secret owner may be presumed.’” Core Labs., 2013 WL , at *5 (quoting IAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d 191, 200 (Tex. App. 2005)).  “[T]he threatened disclosure or use of the trade secrets of another constitutes irreparable injury as a matter of law.” Id.  Reversed the district court’s denial of a preliminary injunction.

Is Use Required for a Patent Infringement Preliminary Injunction? 20

The threat of patent infringement is not irreparable harm. Roper Corp. v. Litton Sys., Inc., 757 F.2d 1266 (Fed. Cir. 1985)  “[M]ere apprehension of potential future infringement” is not irreparable harm. Roper, 757 F.2d at  “[N]o authority anywhere supports the notion that a preliminary injunction may issue in response to rumors of a threat of infringement.” Id. (quoting Chemical Engineering v. Marlo, Inc., 754 F.2d 331, 334 (Fed. Cir. 1984)).  Proof of past infringement will not suffice when the record does not “establish[] present infringement or an immediate threat of renewed infringement.” Id.  Affirmed the district court’s denial of a PI. Yes - Use Required for a Patent Infringement Preliminary Injunction? 21

 "To show irreparable harm, it is necessary to show that the infringement caused harm in the first place." Id. at  "[W]here the accused product includes many features of which only one (or a small minority) infringe,... irreparable harm does not alone justify injunctive relief;... the patentee must also establish that the harm is sufficiently related to the infringement." Id.  Where "the accused product would sell almost as well without incorporating the patented feature,... the harm that flows from the alleged infringement (the only harm that should count) is not [substantial]." Id. at  Instead, it must be shown that “that the patented feature is an affirmative driver of consumer demand, or that [its] absence would suppress consumer demand.” Id. at 1375 (quoting Apple Inc. v. Samsung Electronics Co., Ltd., 877 F.Supp. 2d 838 (N.D. Cal. 2012). Causal Nexus Requirement - Apple Inc. v. Samsung Electronics Co., Ltd., 695 F.3d 1370 (Fed. Cir. 2012) 22

In the movie Elf, Buddy knows Santa at Gimbels is a fake because he smells like what? 23

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How Should the Court Weigh the Irreparable Harm Factor in Deciding Whether to Enjoin Santa’s use of the name “Red Rider.” (a) For the injunction because Santa failed to rebut the presumption of irreparable harm (b) Against injunction because traditional four-factor analysis does not apply in trademark cases (c) Against injunction because eBay eliminated the presumption of irreparable harm (e) Against injunction because the undisputed evidence is that Santa’s products are superior, so any confusion will not hurt the Red Ryder brand 25

Camp 1: Presumption is intact for trademark disputes Innovation Ventures, LLC v. Body Dynamics, Inc., 2009 U.S. Dist. LEXIS (S.D. Michigan 2009) (upheld presumption of irreparable harm and granted motion for preliminary injunction) Camp 2: Question presumption for trademark but decline to address the issue of presumption; decide on the merits Paulsson Geophysical Servs. V. Sigmar, 529 F.3d 303 (5th Cir. 2008) (“We have no need to decide whether a court may presume irreparable injury upon finding a likelihood of confusion in a trademark case, a difficult question considering the Supreme Court’s opinion in eBay.”) N. Am. Med. Corp. v. Axiom Worldwide, Inc. 522 F.3d 1211 (11th Cir. 2008) (“we decline to decide whether the district court was correct in its holding that the nature of the trademark infringement gives rise to a presumption of irreparable injury” Camp 3: eBay applies to trademark cases (preliminary injunctions); no presumption of irreparable harm for any IP cases Herb Reed Enterprises, LLC v. Florida Entertainment Management, No (9 th Cir. Dec. 2, 2013) (eBay applies to preliminary injunctions in trademark cases; no presumption of irreparable harm) Salinger v. Colting, 607 F.3d 68 (2nd Cir. 2010) (applies eBay to copyright dispute for preliminary injunction; “[w]e see no reason that eBay would not apply with equal force to an injunction in any type of case”) Does eBay Abolish the Presumption of Irreparable Harm in Trademark Cases? 26

What Must the Red Ryder Company Prove to Establish “Nexus” in the Irreparable Harm Analysis for the Patent Claim (a) The patented rifle barrel is the sole basis for demand for the BB guns (b) The patented rifle barrel is a basis for demand for the BB guns (c) The patented barrel makes Santa’s gun significantly more desirable than it would be without the rifle barrel – or that the gun would be significantly less desirable without the patented feature (e) Ho ho ho! The law is so unsettled in this area that nobody knows. 27

Apple Inc. v. Samsung Electronics Co., Ltd., Slip. Op. No (Nov. 18, 2013) 28 “[W]e reject Apple’s arguments and confirm that the district court was correct to require a showing of some causal nexus between Samsung’s infringing conduct and Apple’s alleged harm. That said, we agree with Apple that certain of the standards arguably articulated by the district court go too far.” Id. at 18. It is true that Apple must “show that the infringing feature drives consumer demand for the accused product.” … However, these principles do not mean Apple must show that a patented feature is the one and only reason for consumer demand…. Id. at 19. Thus, rather than show that a patented feature is the exclusive reason for consumer demand, Apple must show some connection between the patented feature and demand for Samsung’s products. There might be a variety of ways to make this required showing. Id.

In the movie Die Hard, what does John McLean write on the sweatshirt of the first terrorist he encounters 29

Extra Slides 30

In the animated version of “How the Grinch Stole Christmas,” the Grinch uses what animal to pull his sled? 31