Judge Robinson Modifies Permanent Injunction Based on Changed Circumstances

Judge Robinson previously granted a permanent injunction in this case in March 2014. The defendants have now moved for relief from continued application of that injunction, arguing that the rationale for the injunction has changed warranting modification of the injunction. Invista N.Am. S.A.R.L., et al. v. M&G USA Corp., et al., C.A. No. 11-1007-SLR, Memo. Or. at 1-2 (D. Del. Dec. 28, 2015).

Judge Robinson began her analysis of defendants’ request by rejecting the contention that the PTO’s invalidiation of the patent in suit during reexamination was grounds to modify the injunction because “the PTO’s determination is far from a final one, and . . . the Federal Circuit has already reviewed the ‘216 patent on appeal and affirmed the jury’s verdict of validity. Therefore, while the reexamination proceeding may be one factor to review in connection with defendants’ request for relief, it is by no means dispositive.” Id. at 3.

“With respect to the ‘different competitive reality’ that exists now,” however, Judge Robinson found that “the record before the court reflects several significant factors which have changed since (or were not apparent to the court in) March 2014.” Id. The Court’s prior determination that there were only two suppliers of products covered by the patented technology in the market (the plaintiff and the defendant) was no longer true in light of at least two other suppliers. “Moreover, the fact that plaintiffs have made no commercial in-roads with its . . . product since March 2014 indicates that the patented technology is not plaintiffs’ primary revenue source and calls into question whether such technology actually drove customer demand for defendants’ . . . product.” Id. at 3-4.

Overall, therefore, Judge Robinson found that the analytical framework for a permanent injunction had changed: “As to the first prong of the test, likelihood of success on the merits, the PTO’s finding of invalidity on reexamination – while not final – certainly adds an element of ambiguity to the analysis, when there was none in March 2014. The second prong of the analysis is irreparable harm. As noted, the harm advanced by plaintiffs in 2014 was ‘lost sales and market share, leading to the loss of research and development activities, a loss of goodwill in the market, and a forced loss of their patent exclusivity.’ Plaintiffs have had more than 18 months to generate market share for their PolyShield product and have failed to do so. Without sales in the first instance, it is difficult to justify imposition of injunctive relief based on lost sales and market share.” Id. at 4. Moreover, the balance of hardships weighed in favor of the defendants given that the plaintiff could be adequately compensated by a royalty (which Judge Robinson ordered be deposited in escrow in case the patent-in-suit survived appeal) and the “public interest is evenly balanced at best, with the ‘216 patent’s validity under scrutiny and its legal monopoly reducing competition.” Id. at 5.

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