Thursday, August 29, 2013

CAFC discusses clarification of an injunction order

from within Aevoe v. AE Tech :

AE Tech Co., Ltd. (“AE Tech”), S&F Corporation, and
GreatShield, Inc.1 appeal the district court’s preliminary
injunction granted in favor of Aevoe Corporation (“Aevoe”)
barring particular products from the market. The district
court originally granted the injunction in January 2012.
AE Tech did not appeal from that order. In May 2012, the
district court concluded that the Appellants had violated
the injunction with an alleged redesign. At that time, the
court altered certain language in the injunction. Appellants
now argue that the court modified the injunction in
May 2012 and that their appeal from that modification is
timely. Because the district court merely clarified the
scope of the original injunction in its May 2012 order, we
find there was no modification that substantially changed
the legal relationship between the parties. Based on this
finding, we dismiss this appeal for lack of jurisdiction.


As such, the court analyzed whether it had committed
clear error in its application of the criteria for determining
whether to grant a preliminary injunction, i.e., likelihood
of success on the merits, irreparable injury, balance
of hardships, and the public interest.
See Aevoe Corp.,
ECF No. 43 (D. Nev. March 7, 2012). The district court
noted that AE Tech had waived the right to assert invalidity
defenses to Aevoe’s request for a preliminary injunction
by not asserting them when given a full and fair
opportunity to do so, and that there was no intervening
change in controlling law. The court then concluded that
it had not committed clear error, denied AE Tech’s motion
to reconsider, and refused to vacate the injunction. Id.
The court, however, noted that Aevoe did not oppose AE
Tech’s request to remove the “counterfeit” and “colorable
imitation” language from the injunction to clarify that the
injunction is no broader than permitted under 35 U.S.C.
§ 271. Id.


After examining the redesigned AE Tech product, the
district court found that the added channels were a nonfunctional
and trivial attempt
to design around the ’942
patent. See Aevoe Corp., ECF No. 65 (D. Nev. May 2,
2012). The court found that the redesigned AE Tech
screen protector was not more than colorably different
than the enjoined products. Id. Accordingly, the court
held all defendants in contempt and concluded that
sanctions against AE Tech were appropriate.3 Id. The
court also changed the language of the preliminary injunction
by adding back the “colorable imitation” phrase.
See Aevoe Corp., ECF No. 66 (D. Nev. May 2, 2012). The
court also explicitly named the S&F Defendants as enjoined
parties. Id. The injunction was altered as follows
(words in brackets were added by the district court):


This court applies its “own law and not the law of the
regional circuit to issues concerning our jurisdiction.”
Ultra-Precision Mfg. Ltd. v. Ford Motor Co., 338
F.3d 1353, 1356 (Fed. Cir. 2003); see also Int’l Elec. Tech.
Corp. v. Hughes Aircraft Co., 476 F.3d 1329, 1330 (Fed.
Cir. 2007) (“We apply our own law, rather than regional
circuit law, to questions relating to our own appellate
jurisdiction.”). The grant, denial, or modification of a
preliminary injunction, however, is not unique to patent
law, so this court applies the law of the regional circuit
when reviewing and interpreting such a decision. See
Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1367 (Fed.
Cir. 2008) (citing Mikohn Gaming Corp. v. Acres Gaming,
Inc., 164 F.3d 891, 894 (Fed. Cir. 1998)). Accordingly, we
apply the law of the regional circuit to determine whether
an injunction has been modified. If the injunction has
been modified under regional circuit law, we may then
exercise appellate jurisdiction under 28 U.S.C. §§ 1292(c)
and (a). See Entegris Inc., 490 F.3d at 1344–45.


As this court held in TiVo Inc. v. Echostar Corp., 646
F.3d 869 (Fed. Cir. 2011) (en banc), when determining
whether a redesigned product falls under the strictures of
an existing injunction, the primary question is whether
the “new” product is “colorably different” from the old
product. 646 F.3d at 882. In other words, whether a
redesigned product is “colorably different” from, or a
“colorable imitation” of, the previously enjoined products
is directly relevant to the contempt standard in patent
law. While AE Tech convinced the district court to excise
that language, along with the “counterfeit” language, the
legal relationship between the parties did not change.
Put simply, whether “colorable imitations” were explicitly
mentioned in the injunction language or not, such imitations
fell within its scope; the district court was obligated
to apply the colorable differences test in the contempt
proceeding. See id. at 882–83. Thus, the legal relationship
between the parties was in no way altered by the
court’s changes to the injunction language. Neither the
excision and addition of the “colorable imitation” language
nor the explicit description of the actual redesign amount
to a modification of the preliminary injunction upon which
this court could predicate jurisdiction.


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