Denial of Injunctive Relief

Wernick, Alina

doi:10.1007/978-3-030-72257-9_7

Alina Wernick⁴

Part of the book series: Munich Studies on Innovation and Competition ((MSIC,volume 15))

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Abstract

Based on Arts. 41 and 44 TRIPS, courts have a margin of discretion in the granting of permanent injunctions. In the US, the doctrine of equitable discretion, reinforced by the eBay judgement allows the court to deny injunctions on the grounds such as irreparable harm, public interest, or disproportionality. The instrument has proved to be fitting to address hold-ups created by patent assertion entities. However, it cannot interfere with ex ante market failures, such as refusals to license. The patent misuse doctrine is an equitable defence that may be raised in patent infringement proceedings. It represents a zero-sum-liability rule, where a patent holder does not maintain an entitlement a monetary remedy. Due to its narrow scope of application, the doctrine has little relevance in enabling follow-on innovation. In the EU, the potential of the Enforcement Directive to limit the grant of permanent injunctions is subject to debate. Whereas in the UK, a doctrine of equitable discretion would allow courts to deny injunctive relief in certain situations, the right to obtain permanent injunctions is traditionally more absolute in countries with a civil law system, such as Germany.

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Notes

1.
See Hilty, “Legal Remedies,” 377, 393.
2.
Castro Bernieri, Ex-Post Liability Rules in Modern Patent Law, 90. The authority to issue preliminary injunctions is guaranteed by Art. 50 TRIPS. Unlike permanent injunctions, they are granted prior to the finding of an infringement. Hence, Art. 51 (1) TRIPS “mandates the availability of injunctions to stop (new or further) infringement from occurring.” Gervais, TRIPS Agreement, 2.588. Art. 44 (2) TRIPS limits remedies against uses by governments or uses authorized by governments to adequate remuneration in the circumstances of a case pursuant to Art. 31 (h) TRIPS.
3.
Sujitha Subramanian, “Different Rules for Different Owners - Does a Non-Competing Patentee Have a Right to Exclude? A Study of Post-eBay Cases,” IIC - International Review of Intellectual Property and Competition Law 39, no. 4 (2008): 446.
4.
Ohly, “Patenttrolle,” 780; Gervais, TRIPS Agreement, 2.529, 2.541.
5.
Gervais, TRIPS Agreement, 2.539, 2.541.
6.
Ibid, 2.539.
7.
See, for example, Subramanian, “Different Rules For Different Owners,” 447; Christopher Anthony Cotropia, “Compulsory Licensing under TRIPS and the Supreme Court of the United States’ Decision in eBay v. MercExchange,” in Patent Law: A Handbook of Contemporary Research, ed. Toshiko Takenaka and Rainer Moufang (Cheltenham: Edward Elgar Publishing, 2008): 576-579. Cf. Wolfgang von Meibom and Ralph Nack, “Patents without Injunctions? - Trolls, Hold-Ups, Ambushes and Other Patent Warfare,” in Patents and Technological Progress in a Globalized World: Liber Amicorum Joseph Straus, ed. Wolrad Prinz zu Waldeck und Pyrmont, et al. (Heidelberg: Springer Verlag, 2009): 511.
8.
Cotropia, “Compulsory Licensing under TRIPS,” 579, fn 103.
9.
See, for example, Correa, “Patent Rights 2008,” 244-245; Trade Related Aspects of Intellectual Property Rights, 303-311; Susanne Reyes-Knoche, “Article 30,” in WTO: Trade-Related Aspects of Intellectual Property Rights, ed. Peter-Tobias Stoll, Jan Busche, and Katrin Arend (Leiden: Martinus Nijhoff Publihsers, 2009), 547-552.
10.
Cotropia, “Compulsory Licensing under TRIPS,” 579.
11.
See Sect. 6.2.
12.
See, for example, Subramanian, “Different Rules For Different Owners,” 447; Andrew C. Mace, “TRIPS, eBay and Denials of Injunctive Relief : Is Article 31 Compliance Everything?,” Columbia Science and Technology Law Review 10 (2009): 264, viewing this to approach to represent the broad interpretation of Art. 31 TRIPS; Charlene A. Stern-Dombal, “Tripping over TRIPS : Is Compulsory Licensing under eBay at Odds with U.S. Statutory Requirements and TRIPS?”, Suffolk University Law Review 41 (2007): 268, 272-277; Alexander von Mühlendahl, “Enforcement of Intellectual Property Rights - Is Injunctive Relief Mandatory?,” IIC - International Review of Intellectual Property and Competition Law 38 (2007): 379-380; von Meibom and Nack, “Patents without Injunctions?,” 510.
13.
Cotropia, “Compulsory Licensing under TRIPS,” 574.
14.
Gervais, TRIPS Agreement, 2.439.
15.
Ibid, 2.396 and fn 669, 2.539. Some commentators consider liability rules established on the basis of the first sentence of Art. 44(2) TRIPS to be subject to the requirements of Art. 30 and 31 TRIPS; see Cotropia, “Compulsory Licensing under TRIPS,” 580.
16.
HTC Corp. v. Nokia Corp. [2013] EWHC 3378 (Pat), para 31.
17.
Castro Bernieri, Ex-Post Liability Rules in Modern Patent Law, 281.
18.
Cotropia, “Compulsory Licensing under TRIPS,” 580-581, views the eBay decision as belonging to the category outlined by the second sentence of Art. 44 (2) TRIPS.
19.
See Castro Bernieri, Ex-Post Liability Rules in Modern Patent Law, 95-96.
20.
Cursive added.
21.
“Infringement having been established, it is contrary to the laws of property, of which the patent law partakes, to deny the patentee’s right to exclude others from use of his property .35 U.S.C. § 261[…]It is the general rule that an injunction will issue when infringement has been adjudged, absent a sound reason for denying it[…]In matters involving patent rights, irreparable harm has been presumed when a clear showing has been made of patent validity and infringement.”[citations omitted]. Richardson v. Suzuki Motor Co., LTD, 868 F.2d 1226, 1246-1247 (Fed. Cir. 1989); MercExchange, L.L.C. v. eBay, 401 F.3d 1323, 1329 (Fed. Cir. 2005). However, the Federal Circuit did not hold the right to exclude to be absolute. Donald S. Chisum, Chisum on Patents : A Treatise on the Law of Patentability, Validity, and Infringement, vol. 7 (New York: Matthew Bender, 2016), § 20.04[2][a]; Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1272-1274 (Fed. Cir. 1999).
22.
Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1547 (Fed. Cir. 1995).
23.
City of Milwaukee v. Activated Sludge, 69 F.2d 577, 593 (7th Cir. 1934).
24.
eBay, 126 S. Ct. 1837, 1841.
25.
Ibid, 1839.
26.
Ibid, 1840-1841.
27.
Subramanian, “Different Rules For Different Owners,” 435-437.
28.
eBay, 126 S. Ct. 1837, 1841. (Roberts J concurring). The argumentation of Justice Roberts is not economical, and he does not appear to refer to free-rider problems. Rather, he appears to stress the intrinsic value of the right to exclude to a patent holder.
29.
Ibid, 1841-1842. (Roberts J, concurring).
30.
Subramanian, “Different Rules For Different Owners,” 436.
31.
eBay, 126 S. Ct. 1837, 1842. (Kennedy J, concurring).
32.
Ibid. 1842. (Kennedy J, concurring).
33.
Ibid, 1842. (Kennedy J, concurring), with reference to FTC, To Promote Innovation, 38-39.
34.
eBay, 126 S. Ct. 1837, 1840.
35.
Ibid, 1842. (Kennedy J, concurring). In addition, acknowledging that the injunctions given to business method patents “may have different consequences” for business method patents, he suggests that their “potential vagueness and suspect validity of some of these patents” be addressed through the application of the principles of equity in infringement proceedings concerning such patents. Ibid. (Kennedy J, concurring).
36.
FTC, The Evolving IP Marketplace, 217.
37.
Subramanian, “Different Rules For Different Owners,” 437, 448.
38.
Christopher B. Seaman, “Permanent Injunctions in Patent Litigation after eBay : An Empirical Study,” Iowa Law Review 101 (2016): 1987-1990, 2006. The average rate varies across districts; furthermore, the grant rate was above 90 percent for patents covering pharmaceuticals or biotechnology, whereas, in the electronics, medical devices, and software sectors, permanent injunctions were granted in fewer than 70 percent of cases. Ibid, 1985-1986.
39.
Robert Bosch LLC v. Pylon Mfg. Corp., 659 F3d 1142, 1149 (Fed. Cir. 1995). Marketa Trimble, “Injunctive Relief, Equity and Misuse Rights in US Patent Law,” Gewerblicher Rechtsschutz und Urheberrecht Internationaler Teil 61 (2012): 519.
40.
Chisum, Chisum on Patents, 7, § 20.04[2][c][ix], § 20.04[2][c][iii].
41.
Castro Bernieri, Ex-Post Liability Rules in Modern Patent Law, 136.
42.
Toshiko Takenaka et al., Patent Enforcement in the US, Germany and Japan (Oxford: Oxford University Press, 2015), 13.08.
43.
Apple, Inc. v. Samsung Electronics Co., Ltd. (Apple II), 695 F.3d 1370, 1371 (Fed. Cir. 2012).
44.
Takenaka et al., Patent Enforcement in the US, Germany and Japan, 13.08; Chisum, Chisum on Patents, 7, § 20.04[2][c][iv][A].
45.
Trueposition Inc. v. Andrew Corp., 568 F.Supp.2d 500, 531 (D. Del. 2008). The existence of a two-sided competitive relationship between parties favours a finding of irreparable harm. Chisum, Chisum on Patents, 7, § 20.04[2][c][iv][A].
46.
Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 702-704 (Fed. Cir. 2008).
47.
Takenaka et al., Patent Enforcement in the US, Germany and Japan, 13.12, who note that the case-law is at times inconsistent in this respect.
48.
FTC, The Evolving IP Marketplace, 229-231.
49.
Seaman, “Permanent Injunctions in Patent Litigation after eBay,” 1993.
50.
Z4 Technologies, Inc. v. Microsoft Corp., 434 F.Supp.2d 437, 441 (E.D. Tex. 2006).
51.
Trueposition, 568 F.Supp.2d 500, 531.
52.
eBay, 126 S. Ct. 1837, 1842, (Kennedy J, concurring).
53.
Bosch v. Pylon, 659 F3d 1142, 1850-1852.
54.
Apple Inc. v. Motorola Inc., 757 F.3d 1286, 1331-1332 (Fed. Cir. 2014); Igor Nikolic, “Who Needs Injunctions? Alternative Remedies in Standard Essential Patents Disputes,” Journal of Intellectual Property Law & Practice 12, no. 2 (2017): 128.
55.
Apple v. Motorola, 757 F.3d 1286, 1332; Nikolic, “Who Needs Injunctions?” 128.
56.
Apple v. Motorola, 757 F.3d 1286, 1333.
57.
Takenaka et al., Patent Enforcement in the US, Germany and Japan, 13.10; Ichiro Nakayama and Yoshiyuki Tamura, “Denial of Injunctive Relief on the Grounds of Equity,” in Compulsory Licensing: Practical Experiences and Ways Forward, ed. Reto M. Hilty and Kung-Chung Liu (Heidelberg: Springer Verlag, 2015), 277-278; Apple, Inc. v. Samsung Electronics Co., Ltd. (Apple I), 678 F.3d 1314, 1324 (Fed. Cir. 2012).
58.
Apple II, 695 F.3d 1370, 1375.
59.
Ibid.
60.
Apple I, 678 F.3d 1314, 1324. “There might be a variety of ways to make this required showing, for example, with evidence that a patented feature is one of several features that cause consumers to make their purchasing decisions. It might also be shown with evidence that the inclusion of a patented feature makes a product significantly more desirable. Conversely, it might be shown with evidence that the absence of a patented feature would make a product significantly less desirable.” Apple, Inc. v. Samsung Electronics Co., Ltd. (Apple III), 735 F.3d 1352, 1364 (Fed. Cir. 2013).
61.
Takenaka et al., Patent Enforcement in the US, Germany and Japan, 13.10.
62.
Rice & Adams Corp. v. Lathrop, 278 U.S. 509, 514 (1929).
63.
Chisum, Chisum on Patents, 7, § 20.04[2][c][vi] & § 20.04.[2][c][viii].
64.
Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1330 (Fed. Cir. 2008).
65.
Chisum, Chisum on Patents, 7, §20.04.[2][c][vi].
66.
Takenaka et al., Patent Enforcement in the US, Germany and Japan, 13.14.
67.
Windsurfing Intern. Inc. v. Amf, Inc., 782 F.2d 995, 1003, fn 3 (Fed. Cir. 1986). See Broadcom v. Qualcomm, 543 F.3d 683, 704, which confirmed that an injunction should not be denied on the basis “that successful exploitation of infringing technology shields a party from injunctive relief” (citing the district court’s decision on permanent injunction).
68.
Hynix Semiconductor Inc. v. Rambus Inc., 609 F.Supp.2d 951, 970 (N.D. Cal. 2009).
69.
FTC, The Evolving IP Marketplace, 232.
70.
See Z4 Technologies v. Microsoft, 434 F.Supp.2d 437, 441-443.
71.
Hynix v. Rambus, 609 F.Supp.2d 951, 984-985.
72.
See Chisum, Chisum on Patents, 7, 20.04[2][iv][C], fn 338 with the respective case law.
73.
Martek Biosciences Corporation v. Nutrinova Inc., 520 F.Supp.2d 537, 559 (D.Del.2007).
74.
See Chisum, Chisum on Patents, 7, 20.04[2][c][iv][A], fn 319 with the respective case law.
75.
See ibid, 20.04[2][c][ix].
76.
See City of Milwaukee, 69 F.2d 577, 593; Rite-Hite v. Kelley, 56 F.3d 1538, 1547.
77.
See for example: Tivo Inc. v. Echostar Communications Corp., 446 F.Supp.2d 664, 670 (E.D. Tex. 2006).
78.
Castro Bernieri, Ex-Post Liability Rules in Modern Patent Law, 137; FTC, The Evolving IP Marketplace, 233; Chisum, Chisum on Patents, 7, § 20.04[2][c][vii].
79.
Chisum, Chisum on Patents, 7, § 20.04[2][c][vii] who refers to Amgen, Inc. v. F. Hoffmann-La Roche Ltd., 581 F.Supp.2d 160, 168 (D. Mass. 2008).
80.
Chisum, Chisum on Patents, 7, § 20.04[2][c][vii].
81.
FTC, The Evolving IP Marketplace, 233. Cf. Chisum, Chisum on Patents, 7, §20.04[2][c][vii]. The FTC’s argumentation in favour of consumer interests can be seen to parallel the final criterion of the European essential facilities test as established in the Microsoft case, discussed Sect. 8.5.4.2.
82.
Obiter dicta, “the public has an interest in encouraging participation in standard-setting organizations, but also that SEPs are not overvalued.” Apple v. Motorola, 678 F.3d 1314, 1322.
83.
Seaman, “Permanent Injunctions in Patent Litigation after eBay,” 1983 also includes firms that conduct R&D but do not commercialize technology in his definition of PAE; however, he excludes universities from the category. Ibid, 1988, fn 243. Cf. Chien, “From Arms Race to Marketplace,” 328.
84.
Colleen v. Chien and Mark A. Lemley, “Patent Holdup, the ITC and the Public Interest,” Cornell Law Reviw 98, no. 1 (2012): 10.
85.
Gupta and Kesan, Studying the Impact of eBay on Injunctive Relief in Patent Cases, 22-26, 37, 38.
86.
Trimble, “Injunctive Relief, Equity and Misuse Rights in US Patent Law,” 521.
87.
Chien and Lemley, “Patent Holdup, the ITC and the Public Interest,” 2. However, eBay increased the appeal of the ITC as a forum to PAEs; see ibid.
88.
See ibid.
89.
19 U.S.C. § 1337 (d) (1) (2012). Namely 1) public health and welfare, 2) competitive conditions in the United States’ economy, 3) the production of like or directly competitive articles in the United States, and 4) United States consumers. 19 U.S.C. § 1337 (d) (1).
90.
Nikolic, “Who Needs Injunctions? Alternative Remedies in Standard Essential Patents Disputes,” 129.
91.
Letter from Michael B. G. Froman, Ambassador, Office of the U.S Trade Representative Office to Irving A. Williamson, Chairman, U.S. International Trade Commission. (2 August 2013); Nikolic, “Who Needs Injunctions? Alternative Remedies in Standard Essential Patents Disputes,” 128-130. See also Vincent Angwenyi, “Hold-up, Hold-out and F/RAND : Quest for Balance,” Gewerblicher Rechtsschutz und Urheberrecht Internationaler Teil 66, no. 2 (2017): 107-109.
92.
Lemley and Melamed, “Missing the Forest for the Trolls,” 2140-2144.
93.
See fn 1683.
94.
Castro Bernieri, Ex-Post Liability Rules in Modern Patent Law, 259.
95.
Continental Paper Bag, 210 U.S. 405, 429. See also Hynix v. Rambus, 609 F.Supp.2d 951, 968: “The reasoning of Continental Paper Bag suggests that it is entirely equitable for a patent holder to suppress the use of an invention to maximize its profits from other endeavors.”
96.
35 U.S.C § 271 (d) (4).
97.
3M Innovative Properties Co. v. Avery Dennison Corp., Civil No. 01-1781 (JRT/FLN), 2-3 (D. Minn. Sep. 25, 2006); See also Chisum, Chisum on Patents, 7, § 20.04[2][c][v][B].
98.
Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1328.
99.
eBay, 126 S. Ct. 1837, 1840-1841; Chisum, Chisum on Patents, 7, § 20.04[2][c][v][B].
100.
Subramanian, “Different Rules For Different Owners,” 420.
101.
FTC, The Evolving IP Marketplace, 219. See also Seaman, “Permanent Injunctions in Patent Litigation after eBay,” 2006.
102.
See Chien and Lemley, “Patent Holdup, the ITC and the Public Interest,” 10; Gupta and Kesan, Studying the Impact of eBay on Injunctive Relief in Patent Cases, 33-37.
103.
Gupta and Kesan, Studying the Impact of eBay on Injunctive Relief in Patent Cases, 36.
104.
Ohly, “Patenttrolle,” 790.
105.
FTC, The Evolving IP Marketplace, 220, 224-225.
106.
Subramanian, “Different Rules For Different Owners,” 433.
107.
Lemley, “Contracting around Liability Rules,” 479.
108.
35 U.S.C. § 284 (2012); Hovenkamp et al., IP and Antitrust, 1, § 2.02[F].
109.
Halo Electronics, Inc. v. Pulse Electronics, Inc., et al., No. 14-1513, slip. op. at 15 (Sup. Ct. 13 June 2016).
110.
However, with regard to infringements of weak patents, such monetary remedies would prove overrewarding.
111.
Lemley, “Ignoring Patents,”, 80.
112.
Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 494 (1942), and the references to cases.
113.
Ibid, 493.
114.
Ibid.
115.
Ibid.
116.
Princo Corp. v. ITC, 616 F.3d 1318, 1321 (Fed. Cir. 2010).
117.
Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 517-519 (1917).
118.
See ibid, 518; Morton Salt, 314 U.S. 488, 492; Brulotte v. Thys. Co., 379 U.S. 29, 33 (1964).
119.
Brulotte, 379 U.S. 29, 33.
120.
Areeda and Hovenkamp, Antitrust Law, X, at 1782; see also Lim, Patent Misuse and Antitrust Law, 90-154.
121.
Motion Picture Patents, 243 U.S. 502, 517-518.
122.
Morton Salt, 314 U.S. 488, 492. See similarly Motion Picture Patents, 243 U.S. 502, 517-518.
123.
Morton Salt, 314 U.S. 488, 494.
124.
Motion Picture Patents, 243 U.S. 502, 510; Morton Salt, 314 U.S. 488, 491.
125.
Motion Picture Patents, 243 U.S. 502, 513.
126.
Morton Salt, 314 U.S. 488, 494.
127.
Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 140 (1969).
128.
Morton Salt, 314 U.S. 488, 490; Zenith Radio, 395 U.S. 100, 140.
129.
Act of July 19, 1952, ch. 950, 66 Stat 811, as codified at 35 U.S.C. § 271
130.
Hovenkamp et al., IP and Antitrust, 1, § 3.02[A]. This statute was thus intended to overturn Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661 (1944). Ibid. The current version of the statute is 35 U.S.C. § 271 (2012).
131.
Lim, Patent Misuse and Antitrust Law, 430.
132.
USM Corp., v. SPS Techs., Inc., 694 F.2d 505, 512 (7th Cir. 1982).
133.
See Robert J. Hoerner, “Decline (and Fall?) of the Patent Misuse Doctrine in the Federal Circuit,” Antitrust Law Journal 69, no. 3 (2002): 672-675; Lim, Patent Misuse and Antitrust Law, 60-89; Hovenkamp et al., IP and Antitrust, 1, § 3.02[A].
134.
Windsurfing Intern. Inc. v. Amf, Inc. 782 F.2d 995, 1001-1002; Princo, 616 F.3d 1318, 1334.
135.
Virginia Panel Corp. v. Mac Panel Co., 133 F.3d 860, 869 (Fed. Cir.1997).
136.
Patent Misuse Reform Act, Pub. L. Np. 100-703, 102 Stat. 4674 (1988).
137.
For a discussion of the development of the interpretation of this provision, see Areeda and Hovenkamp, Antitrust Law, X, 1781d.
138.
The statute does not condition a refusal on the market power of the right holder. Trimble, “Injunctive Relief, Equity and Misuse Rights in US Patent Law,” 516.
139.
Lim, Patent Misuse and Antitrust Law, 154.
140.
See USM v. SPS, 694 F.2d 505, 512.
141.
See Mark A. Lemley, “Economic Irrationality of the Patent Misuse Doctrine,” California Law Review 78, no. 6 (1990): 1599.
142.
Lim, Patent Misuse and Antitrust Law, 155-199.
143.
See Princo, 616 F.3d 1318, 1321, 1329, 1334.
144.
Hovenkamp et al., IP and Antitrust, 1, § 3.02[E].
145.
Areeda and Hovenkamp, Antitrust Law, X, at 1781. Antitrust has a common, relatively undisputed foundation in neoclassical economics. It has focused on assessing relatively predictable and quantifiable static competition and has developed strict standards of causation and harm. In contrast, dynamic efficiency is considerably more difficult to model, measure, and foresee and the welfare-enhancing effects of patent policy are widely debated. According to Areeda and Hovenkamp, it is possible for misuse policy, given its less strict standards of proof, to address the less robust features that are inherent to innovation and are beyond the reach of antitrust policy. As an instrument of IP, policy misuse serves the goal of promoting innovation. Ibid, 1781 and 1982.
146.
“Because of its roots in patent and antitrust policies, patent misuse offers itself as an alternative to antitrust law through which judges may consider the societal implications of both the alleged misconduct and the estoppel on innovation. Because of its antitrust fixtures, patent misuse allows the court to apply a rule of reason analysis to also weight the effect of both the alleged misconduct and estoppel on the competitive process. It allows, but does not require, complex economic analysis. It reacts to misconduct, but imposes no threat of litigation unless the patentees themselves choose to provoke its application. It imposes no fines or damages, but instead acts as guardian of fair play in the patent arena by suspending the enforcement of the patent.” Lim, Patent Misuse and Antitrust Law, 200.
147.
Ilkka Rahnasto, Intellectual Property Rights, External Effects and Anti-Trust Law : Leveraging IPRs in the Communications Industry (Oxford: Oxford University Press, 2003), at 7.19.
148.
Princo, 616 F.3d 1318, 1331-1333. In Princo, Philips and Sony agreed to incorporate an analogue technological solution in the Orange Book standard for CD-Rs and CD-RWs. Sony had a patent on digital technology that overlapped with the standard. Philips and Sony agreed that Sony would not license the patent to competing digital technologies beyond package licenses for the analogue technology. Ibid, 1322-1332. The dissenting Judge Dyk criticized the majority’s interpretation of the misuse doctrine as being too strict with regard to providing protection for nascent competitive technologies. Ibid, 1357.
149.
See Daryl Lim, “Misconduct in Standard Setting : The Case for Patent Misuse,” IDEA: The Journal of Law and Technology 51, no. 4 (2011): 585, in which the author discusses this possibility in relation to de jure SEPs.
150.
Brulotte, 379 U.S. 29, 33.
151.
See Zenith Radio, 395 U.S. 100, 135; Lim, Patent Misuse and Antitrust Law, 123-124.
152.
The misuse doctrine could potentially interfere with the use of reach-through royalties, which are calculated on the basis of sales of products, when they have the effect of hindering innovation. For example, by assigning such royalties, a patent holder may expand the scope of his patent though controlling follow-on innovation and reducing the incentives to innovate downstream. Areeda and Hovenkamp, Antitrust Law, X, 1782g. In the context of a patent thicket, the use of reach-though royalties by a number of patent-holders could lead to the creation of a royalty-stacking problem and reduce incentives to innovate. Ibid, 1782g, fn 204; Lim, Patent Misuse and Antitrust Law, 124. Nevertheless, from the perspective of the misuse doctrine, the potential harmful effects that can derive from reach-though royalties are separate from royalty-stacking and anti-commons problems, which are not considered to be remediable as misuses. First, a misuse claim is a defense against an individual patent holder in infringement proceedings and is therefore inappropriate for addressing a market failure that results from the uncoordinated actions of individual patent holders who seek to maximize their welfare. Second, a misuse claim on the basis of royalty stacking would be difficult to justify, as it would suggest that a patent holder would be precluded from demanding a particular licensing fee due to the royalties demanded by other licensors for the same downstream product. Areeda and Hovenkamp, Antitrust Law, X, at 1782g, fn 204.
153.
See Janice M. Mueller, “Patent Misuse through the Capture of Industry Standards,” Berkeley Technology Law Journal 17, no. 2 (2002): 669-684; Lim, “Misconduct in Standard Setting,” 582-606; Apostolos Chronopoulos, “Patenting Standards - a Case for US Antitrust Law or a Call for Recognizing Immanent Public Policy Limitations to the Exploitation Rights Conferred by the Patent Act?,” IIC - International Review of Intellectual Property and Competition Law 40, no. 7 (2009) 800–816.; Marshall Leaffer, “Patent Misuse and Innovation,” Journal on Telecommunications and High Technology Law 10 (2010): 165 -167; Lim, Patent Misuse and Antitrust Law, 217-226.
154.
See Townshend v Rockwell Int’l Corp., 55 U.S.P.Q.2d (BNA) 1011 (N.D. Cal. 2000), as cited in Mueller, “Patent Misuse through the Capture of Industry Standards,” 669; Lim, Patent Misuse and Antitrust Law, 217-219.
155.
See Lim, “Misconduct in Standard Setting,” 585.
156.
The misuse defense has been unsuccessfully invoked in litigation against a non-practicing entity employing an offensive litigation strategy on the basis of collecting royalties from weak patents; see Intellectual Ventures I LLC v Capital One Fin. Corp. 1:13-CV-00740 AJT, 2013 WL 6682981 (E.D. Va. Dec 18. 2013), as cited in “Standard Essential Patents, Trolls, and the Smartphone Wars : Triangulating the End Game,” Penn State Law Review 119 (2014): 84-87, fn 483. However, in other proceedings initiated by the same non-practicing entity, the court treated the patent hold-up as an instance of the tying of valid patents with invalid patents, but it did not reach a conclusion on the matter due to a lack of factual evidence. Intellectual Ventures I LLC v. Symantec Corp. No 13-cv-440. 2014 WL 4773954 (D Del Sept 24. 2014) as cited in Michelle D. Miller and Janusz A. Ordover, “Intellectual Ventures v. Capital One : Can Antitrust Law and Economics Get Us Past the Trolls?,” CPI Antitrust Chronicle 12 (2015): 19.
157.
Lim, Patent Misuse and Antitrust Law, 199. However, the misuse defence could, in principle, be raised in litigation against virally licensed patents. Such open-source initiatives are arguably aligned both with public policy and the rule of reason and hence do not represent patent misuse. Robert Feldman, “Open Source Biotechnology Movement : Is It Patent Misuse?,” Minnesota Journal of Law, Science & Technology 6, no. 1 (2004), 167.
158.
Leaffer, “Patent Misuse and Innovation,” 167.
159.
See Hilty, “Legal Remedies,” 377, 393.
160.
Rec. 10 Enforcement Directive.
161.
Rec. 32 Enforcement Directive.
162.
Art. 3(2) Enforcement Directive.
163.
Ansgar Ohly, “Three Principles of European IP Enforcement Law : Effectiveness, Proportionality, Dissuasiveness,” in Technology and Competition: Contributions in Honour of Hanns Ullrich, ed. Josef Drexl (Brusseles: Larcier, 2009), 264.
164.
von Mühlendahl, “Is Injunctive Relief Mandatory?,” 377-378.
165.
Reto M. Hilty, Role of Enforcement in Delineating the Scope of IP Rights, Research Paper No. 15-03 (Munich: Max Planck Institute for Innovation & Competition, 2015), 16-17.
166.
See rec 25 Enforcement Directive.
167.
Ohly, “Three Principles of European IP Enforcement Law,” 259, 264; Hilty, Role of Enforcement in Delineating the Scope of IP Rights, 16.
168.
Commission Staff Working Document, Analysis of the Application of Directive 2004/48/EC of the European Parliament and the Council of 29 April 2004 on the Enforcement of Intellectual Property Rights in the Member States, COM (2010) 779 final (22 October 2012), 6. For example, Art. 12 was not implemented in Germany, France, the Netherlands, and Italy. Mark Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions : A Comparative Study,” Journal of Intellectual Property Law & Practice 10, no. 3 (2015), 181-186.
169.
Ohly, “Three Principles of European IP Enforcement Law,” 258, 266.
170.
Ibid, 261-262.
171.
Rec. 17 Enforcement Directive, which specifies that “[t]he measures, procedures and remedies provided for in this Directive should be determined in each case in such a manner as to take due account of the specific characteristic of that case, including the specific features of each intellectual property right and, where appropriate, the intentional or unintentional character of the infringement.”
172.
Cf. von Meibom and Nack, “Patents without Injunctions?,” 497, 519 who argue that, in Europe, the potential problems associated with PAEs would need to be resolved on the basis of competition law and outside of patent law.
173.
Ohly, “Three Principles of European IP Enforcement Law,” 266-267.
174.
Axel Walz, “Patentverletzungsklagen im Lichte des Kartellrechts,” Gewerblicher Rechtsschutz und Urheberrecht Internationaler Teil 62, no. 8-9 (2013): 727-728, 731.
175.
The implications of the Huawei decision on the scope of application of compulsory licenses of competition law are discussed Sects. 8.6.4.5 and 8.7.3.1–8.7.3.2.
176.
Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee. Setting out the EU approach to Standard Essential Patents. COM (2017) 712 final (29 November 2017), 10.
177.
Hilty, “Legal Remedies,” 389.
178.
Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 181.
179.
Hilty, Role of Enforcement in Delineating the Scope of IP Rights, 17.
180.
Hilty, “Legal Remedies,” 391.
181.
Art. 3(2) Enforcement Directive.
182.
Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 181. See also rec. 12 Enforcement Directive.
183.
Hilty, “Legal Remedies,” 391-392.
184.
Rec. 32 Enforcement Directive.
185.
See Hilty, Role of Enforcement in Delineating the Scope of IP Rights, 7 and fn 24, 15.
186.
See Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 181-186 for an account of Germany, France, Italy, the Netherlands, and the UK.
187.
Dietrich Kamlah, “Injunctive Relief,” in Patent Law: A Handbook on European and German Patent Law, ed. Maximilian W. Haedicke and Henrik Timmann (Munich: Nomos Verlagsgesellschaft mbH & Co KG, 2014), § 10 at 25. However, similarly to EU law, the right to an injunction can be subject to limitations upon conflict with legal principles of an equal or higher rank, for example those deriving from competition law. Ibid.
188.
Ohly, “Patenttrolle” 795. However, Ohly suggests that the right to a permanent injunction could be limited on the basis of the unwritten general principle of proportionality and Art. 3(2) of the Enforcement Directive in particular situations, such as exploitative hold-ups or in the event that a patent is a smaller component of a cumulative innovation. Other factors to take into consideration would be whether a patent holder is an NPE, as well as the level of negligence of the infringer. Ibid, 796-798. For a more conservative view of the relevance of the principle of proportionality in German patent law, see Ralf Uhrich, “Entwaffnung der “Patenttrolle”? Zur Einschränkbarkeit des patentrechtlichen Unterlassungsanspruchs im anglo-amerikanischen und deutschen Recht,” Zeitschrift für Geistiges Eigentum / Intellectual Property Journal 1, no. 1 (2009): 87-93. On the possibility of seeking a temporary suspension of injunctive relief enforcement proceedings in Germany, see Alexander Harguth and Steven Carlson, Patents in Germany and Europe : Procurement, Enforcement and Defence : An International Handbook (Alphen aan den Rijn: Kluwer Law International, 2011), 150, 365.
189.
For an overview of application of these defences in Germany, France, Italy, the Netherlands, and the UK, see Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 181-186. For a review of different abuse of rights defences, see Ohly, “Patenttrolle,” 794-795.
190.
§ 242 BÜRGERLICHES GESETZBUCH [BGB] [Civil code], translation at https://www.gesetze-im-internet.de/englisch_bgb/ (Ger.) On the applicability of § 242 BGB, see Uhrich, “Entwaffnung der “Patenttrolle”?,” 82.
191.
Orange Book Standard, BGH, 6 May 2009, IIC 2010, 369.
192.
Hilty, “Legal Remedies,” 388.
193.
Shelfer v. City of London Electric Lighting Co. [1895] 1 Ch 287, 322-323; Jaggard v. Sawyer [1995] 1 WLR 269, 287; Navitaire Inc v. Easyjet Co Ltd (No 2), [2005] EWHC 282 (Ch) [2006] RPC (4) 213, para 101; HTC Corp. v. Nokia Corp. [2013] EWHC 3378 (Pat), para 8.
194.
Shelfer v. City of London [1895] 1 Ch 287,322-323.
195.
Lawrence and Another v. Coventry and Others [2014] UKSC 13 [2014] WLR 422, paras 121-122.
196.
Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 186.
197.
Jaggard v. Sawyer [1995] 1 WLR 269, 283B-C.
198.
Navitaire Inc v. Easyjet Co Ltd (No 2), [2005] EWHC 282 (Ch) [2006] RPC (4) 213, para 104.
199.
HTC Corp. v. Nokia Corp. [2013] EWHC 3378 (Pat), para 26.
200.
Ibid, para 32.
201.
Ibid.
202.
Ibid, para 30, with references, inter alia, to Case C-53/96, Hermès International (a partnership limited by shares) v. FTH Marketing Choice BV, 1998 E.C.R. I-3603, which discusses the interpretation of TRIPS at para 28.
203.
HTC Corp. v. Nokia Corp. [2013] EWHC 3378 (Pat), paras 28-30.
204.
See ibid, para 31.
205.
Ibid. However, J Arnold found Art. 30 TRIPS as permitting “the recognition of a limited jurisdiction to withhold and injunction in special circumstances”, ibid.
206.
In addition, Art. 118 (1) of the 18^th Draft of the Rules of Procedure of the UPC makes a reference to the discretion of the court under Art. 63 UPCA.
207.
Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 188.
208.
Ibid, 187-188.
209.
See, for example, Hilty et al., Unitary Patent Package, 3-4.
210.
Marfé et al., “Power of National Courts and the Unified Patent Court to Grant Injunctions,” 188.
211.
Case C-367/15, Stowarzyszenie ‘Oławska Telewizja Kablowa’ v. Stowarzyszenie Filmowców Polskich, 2017 O.J. (C78) 2, paras 23, 34.

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Alina Wernick

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Wernick, A. (2021). Denial of Injunctive Relief. In: Mechanisms to Enable Follow-On Innovation. Munich Studies on Innovation and Competition, vol 15. Springer, Cham. https://doi.org/10.1007/978-3-030-72257-9_7

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