The Mudhopper case

In Wald v. Mudhopper, 2006 U.S. Dist. LEXIS 51669, the WD Ok considered a permanent injunction issue. Plaintiffs [Wald et al.] asked the Court to enter an injunction barring sales activities related to Hole Sweep Sticks, Poly Drill Sticks, or any other infringing variation of those products.

The court noted:

The respective hardships to the parties, when balanced, and the public's
interest also weigh in favor of a permanent injunction. Defendants have not
identified any specific hardship they might suffer as a result of an injunction.
Instead, Defendants' object to an injunction as unnecessary. As support, they
note the immediate cessation of Hole Sweep Stick sales upon learning of the Wald
patent and profess [*17] the intention not to sell Poly Drill Sticks again
unless the Court enters a judgment of non-infringement. However, given the
finding of willful infringement and because there have been no indications that
Defendants do not still possess an inventory of these products or the ability to
secure more, the Court is unpersuaded that there is no need for an injunction.
Cf. W.L. Gore & Assocs., Inc. v. Garlock, Inc., 842 F.2d 1275, 1281-82 (Fed.
Cir. 1988)(noting absence of reason for stopping infringement, failure to
profess an intention not to infringe in the future, and the capacity to resume
production as supporting the grant of an injunction). Plaintiffs bear the risk
of future infringement, while there appears to be no harm to Defendants or the
public's interest resulting from an injunction. Therefore, the Court finds that
equitable considerations support Plaintiffs' request for a permanent injunction
on the terms proposed.

***

In the Mudhopper case, the patentee (Wald) got a permanent injunction. In CHRISTIANA INDUSTRIES INC. v. EMPIRE ELECTRONICS, INC., 2006 U.S. Dist. LEXIS 54210, the court considered Defendant's Emergency Motion for reconsideration of the Court's Order granting a preliminary injunction and Emergency Motion to amend or correct the Order granting a preliminary injunction. For the following reasons, the Court: (1) DENIES Defendant's Motion for reconsideration; and (2) GRANTS its Motion to Amend the Order.

In the specific area of irreparable harm, the district court wrote:

Defendant asserts that in Ebay, Inc. v. Mercexchange, LLC, 126 S. Ct. 1837, 164
L. Ed. 2d 641 (2006), the Supreme Court eliminated the presumption of
irreparable harm for preliminary injunctions upon a showing of validity and
infringement.

Plaintiff argues, and this Court agrees, that Ebay did not invalidate the
presumption. The Ebay Court addressed the proper analysis for permanent
injunctive relief. It held that courts err by categorically granting permanent
injunctive relief on a showing of infringement and validity, without analyzing
the traditional four factors for injunctive relief. The Court reiterated that
the grant or denial of injunctive relief rests with the equitable discretion of
the Court, which must consider the four factors.

**
The Christiana court did not get into differences in standards between a PRELIMINARY injunction and a PERMANENT injunction.

The difference is not trivial. As pointed out elsewhere:

In ZEN INVESTMENTS, 2006 U.S. Dist. LEXIS 37171 (decided June 2, 2006), the court noted: "The Third Circuit has been unsettled n5 on whether a plaintiff must prove irreparable harm to receive a permanent injunction, as opposed to a preliminary injunction which always requires a showing of irreparable harm." The eBay decision squarely brings back "irreparable harm" into the permanent injunction calculus without giving much guidance on how to evaluate irreparable harm. The immediate impact will be more uncertainty.

The Zen Investment court quickly identified a problem in the eBay decision: that the Supreme Court did not give guidance on how to evaluate irreparable harm.





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