Thursday, September 29, 2011

Kimberly-Clark: CAFC loses an opportunity to address law of preliminary injunctions

Judge Newman in dissent from the denial of the petition for re-hearing in Kimberly-Clark v. First Quality:

I respectfully dissent from the denial of Kimberly- Clark’s petition for rehearing en banc. The panel’s view of the law governing preliminary injunctions warrants correc- tion, for it is in conflict with the law of the Supreme Court, in conflict with the law of all of the regional circuits, and in conflict with controlling Federal Circuit precedent. Recent aberrations, including this case, have imparted uncertainty and brought further conflict to our own precedent. To reestablish reliable law this issue should be taken en banc, and a consistent position taken on which the district courts and the concerned public can rely.
The matter is not trivial, for it affects whether a pre- liminary injunction is available in a patent case. There is a large difference between whether the movant is likely to prevail after trial of the merits, and whether the nonmovant has proffered a pre-trial defense that “does not lack sub- stantial merit.”1 In deciding whether the patent right should be preserved pendente lite, the question of whether to grant a preliminary injunction includes consideration of the equities and relative harms, not simply whether the ac- cused infringer has offered a colorable basis for avoiding summary judgment.

Past issues are mentioned:

Precedent’s concern for equity places the panel’s ruling in sharp relief. No other circuit denies a preliminary in- junction merely because the nonmovant has raised an argument worthy of consideration. This is not the first case in which this court has departed from the correct standard, or even from recitation of the correct standard. In Ama-, Inc. v., Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001), the court stated that if the alleged infringer “raises a substantial question concerning either infringement or validity, i.e., asserts an infringement or invalidity defense that the patentee cannot prove ‘lacks substantial merit,’ the preliminary injunction should not issue,” quoting a portion of Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997), where the court interpreted precedent as meaning that “if Novo raises a ‘substantial question’ concerning validity, enforceability, or infringement (i.e., asserts a defense that Genentech cannot show ‘lacks substantial merit’) the preliminary injunction should not issue.” The panel herein, with or without its “errata,” adopts this “should not issue” posture without appreciation of the context in which it arose, or of the fac- tual and equitable situations in those cases that cited it. However, a defense that does not “lack substantial merit” is of a different order than a defense that is likely to succeed by clear and convincing evidence.
This court’s departure from the universal standard con- flicts with the Court’s admonition in eBay Inc, v. MercEx- change, L.L.C., 547 U.S. 388, 391 (2006), where in discussing the traditional principles for grant of a perma- nent injunction, the Court held that “these familiar princi- ples apply with equal force to disputes arising under the Patent Act.” See Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1379 (Fed. Cir. 2009) (“The Supreme Court has stated that the general rules applicable to injunc- tions in civil actions apply equally to injunctions in patent cases; there is no room for making the substantial question test a substitute or replacement for the established test for injunctions.” (citing eBay, 547 U.S. at 394)).

And, of non-precedential:

The panel designated this opinion as “non- precedential.” This designation does not relieve the court of its responsibility to provide correct rulings in the case before it. Nor are “non-precedential” rulings insulated from further review; e.g., Teleflex, Inc. v. KSR Int’l Co., 119 Fed. Appx. 282 (Fed. Cir. 2005), reversed, 550 U.S. 398 (2007); A.C. Aukerman Co. v. R.L. Chaides Const., Co., 1991 WL 62407 (Fed. Cir. 1991), vacated, 960 F.2d 1020 (Fed. Cir. 1992) (en banc).


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