Federal Circuit Gives Permanent Injunction its Bite Back

By Maggie Tamburro
Has the Federal Circuit reshaped the Supreme Court’s 2006 opinion in eBay, delivering to plaintiffs renewed leverage in obtaining a permanent injunction?As contrary as that may seem to principles of binding precedent and court authority, and despite a cautionary concurring opinion issued by one of the Federal Circuit judges, a recent decision in Edwards Lifesciences AG v. Corevalve, Inc. seems to have accomplished just that.

In an opinion reaffirming a patentee’s right to exclude and the importance of market exclusivity on innovation, the Federal Circuit has ostensibly sharpened plaintiffs’ ability to receive a permanent injunction against an adjudged infringer under certain circumstances.

The case arose when plaintiffs Edwards Lifesciences AG and Edwards Lifesciences LLC sued defendants in the U.S. District Court for the District of Delaware for infringement of a patent related to a transcatheter heart valve used in heart catheterization procedures. A jury found the patent at issue valid and willful infringement on the part of the defendant, awarding the plaintiffs over $72 million in lost profits damages and more than $1 million as reasonable royalty.

The District Court entered a judgment on the jury’s verdict and sustained the jury’s damages award; however, it declined to issue an injunction against future infringement. On appeal, the Federal Circuit vacated the District Court’s denial of the injunction.

Noting “changed circumstances” regarding defendant’s representations with respect to the location of its manufacturing operation, and noting that the defendant never ceased its infringing manufacture, the Federal Circuit remanded the case, sending it back to the District Court for reconsideration on the issue of denial of the injunction.

Rethinking the Permanent Injunction?

Before politely sending the case back to the District Court for reconsideration of its denial of an injunction, the Federal Circuit delivered quite an earful.

First, it affirmed long standing principles rooted in U.S. patent law, stating, “The innovation incentive of the patent is grounded on the market exclusivity whereby the inventor profits from his invention. Absent adverse equitable considerations, the winner of a judgment of validity and infringement may normally expect to regain the exclusivity that was lost with the infringement.”

Next, it seemingly expanded upon eBay, stating, in cryptic, double-negative fashion, “The Court in eBay did not hold that there is a presumption against exclusivity on successful infringement litigation.” Here, the majority perhaps unwittingly shifted some of the plaintiff’s burden to the defendant - perhaps suggesting a showing that issuance of an injunction would be somehow inequitable.

As most of our readers are aware, the eBay opinion rejected any expectation that, should a plaintiff prevail on claims of infringement, the issuance of a permanent injunction is presumed. Instead, the eBay opinion held that the plaintiff must meet a four factor equitable standard in order for a permanent injunction to issue against an adjudged infringer.

Where Were the eBay Factors?

However, the Federal Circuit majority never specifically addressed the eBay factors, the significance of which was not lost on Circuit Judge Prost, who wrote in a concurring opinion, “[T]he majority excludes from its analysis the four-factor equitable standard, the preamble of which states that ‘the plaintiff must demonstrate’ these factors. Indeed, the majority’s analysis might be read to suggest that the defendant, not the plaintiff, bears the burden of establishing the equitable factors.”

Cautioning against the possibility that the majority’s decision will be interpreted as out of step with the Supreme Court’s eBay factors, Judge Prost stated, “To the extent that one reads this statement as creating the presumption of an injunction once the plaintiff prevails, which must be rebutted by the defendant, that is not the law.”

However, sometimes actions speak louder than words. Despite differing opinions over correct restatements concerning what is or isn’t the law of the land with regard to eBay, the case delivers a renewed punch to plaintiffs seeking a permanent injunction against an adjudged infringer, particularly where circumstances have changed with respect to denial of the injunction at the district court level.

Effect of the Edwards Lifesciences Opinion

Perhaps the Edwards Lifesciences opinion demonstrates just how powerful the Federal Circuit has become and how fact specific such equitable determinations must be. The majority seems to be sending a message that the District Court can exercise equitable discretion without strict application of the eBay factors, depending upon case facts and circumstances, as long as equitable considerations are met which are consistent with fundamental principles of U.S. patent law.

After all, the Supreme Court’s 2006 eBay requirements are based on long standing legal principles of equity that, as pointed out in the Federal Circuit’s opinion, are frequently highly discretionary and case specific. As the Federal Circuit stated, “Statutory and historical as well as commercial considerations impinge on every equitable determination.”

Tell us what you think: Has the Federal Circuit renewed the ability of a plaintiff to receive an injunction against an adjudged infringer?

The case is Edwards Lifesciences AG and Edwards Lifesciences LLC v. Corevalve, Inc. and Medtronic Corevalve, LLC (Federal Circuit, Nov. 13, 2012).

Maggie Tamburro

Maggie Tamburro is an attorney and writer who holds a Juris Doctor from The John Marshall Law School and a Bachelor of Arts from the University of Texas. She was admitted to the Illinois Bar in 1994 and Florida Bar in 1999 and has significant experience in legal research, editing, and writing. Maggie is active her in local community, holding various publicly appointed civic board positions.

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