RIM INJUNCTION UNLIKELY? THINK AGAIN. So far, the RIM litigation has been existing in two parallel worlds between the courts and the USPTO, where "what the USPTO giveth, the courts taketh away." Yesterday's news on the USPTO issuing a final rejection on the '451 patent (which finally published late yesterday) appears to be the slow but inevitable downslide of NTP's patents.
However, until the patents are revoked (i.e., NTP exhausts its appeals), the courts must treat the pending NTP patents as enforceable documents. In other words, the USPTO rejections will have little, if any, impact on the judge's decision after the parties appear in court tomorrow.
While the news from the USPTO appears good for RIM, the existing caselaw tells a different story. In last year's Federal Circuit decision in MercExchange v. EBay, the court held that district courts must grant a preliminary injunction "absent exceptional circumstances." While the case is presently before the Supreme Court, it's still good law, and you can be sure that NTP will be citing copiously from the case. The relevant portions of the ruling are reproduced below:
MercExchange challenges the district court’s refusal to enter a permanent injunction. Because the "right to exclude recognized in a patent is but the essence of the concept of property," the general rule is that a permanent injunction will issue once infringement and validity have been adjudged . . . To be sure, "courts have in rare instances exercised their discretion to deny injunctive relief in order to protect the public interest" . . . Thus, we have stated that a court may decline to enter an injunction when "a patentee’s failure to practice the patented invention frustrates an important public need for the invention," such as the need to use an invention to protect public health.
[I]n this case, the district court did not provide any persuasive reason to believe this case is sufficiently exceptional to justify the denial of a permanent injunction. In its post-trial order, the district court stated that the public interest favors denial of a permanent injunction in view of "a growing concern over the issuance of business-method patents, which forced the PTO to implement a second level review policy and cause legislation to be introduced in Congress to eliminate the presumption of validity for such patents." A general concern regarding business-method patents, however, is not the type of important public need that justifies the unusual step of denying injunctive relief.
Another reason the court gave for denying a permanent injunction was that the litigation in this case had been contentious and that if a permanent injunction were granted, the defendants would attempt to design around it . . . The court’s concern about the likelihood of continuing disputes over whether the defendants’ subsequent actions would violate MercExchange’s rights is not a sufficient basis for denying a permanent injunction. A continuing dispute of that sort is not unusual in a patent case, and even absent an injunction, such a dispute would be likely to continue in the form of successive infringement actions if the patentee believed the defendants’ conduct continued to violate its rights.
The trial court also noted that MercExchange had made public statements regarding its willingness to license its patents, and the court justified its denial of a permanent injunction based in part on those statements. The fact that MercExchange may have expressed willingness to license its patents should not, however, deprive it of the right to an injunction to which it would otherwise be entitled. Injunctions are not reserved for patentees who intend to practice their patents, as opposed to those who choose to license. The statutory right to exclude is equally available to both groups, and the right to an adequate remedy to enforce that right should be equally available to both as well. If the injunction gives the patentee additional leverage in licensing, that is a natural consequence of the right to exclude and not an inappropriate reward to a party that does not intend to compete in the marketplace with potential infringers.