Wednesday, January 17, 2007

District Court of Delaware Visits Injunctions for First Time Since eBay

IMX v. LendingTree, C.A. No. 03-1067-SLR (D. Del. Jan. 10, 2007) (Robinson, C.J.)

Last year, Lending Tree was found to have willfully infringed IMX's US Patent 5,995,947. After the verdict issued, IMX moved for a permanent injunction. Shortly thereafter, the Supreme Court's eBay decision issued, ruling that a plaintiff seeking an injunction must demonstrate: "(1) that it has suffered an irreparable injury;(2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction."

The district court found that IMX put forward no evidence of irreparable harm resulting from defendant's infringement, for example, market or financial data, to support its assertion that LendingTree's infringement would go "unchecked" and would "[diminish] IMX's exclusive rights in its intellectual property."

The court also noted that IMX's licensing activities suggest that the injury would be compensable in damages:

There is no dispute that plaintiff licensed its `947 patent on two occasions, one which stemmed from a settlement with a previously-named defendant in this action, Priceline.com . . . There is no indication in the record that defendant's infringement affected plaintiff's ability to license the technology of the `947 patent . . . Plaintiff's willingness to forego its patent rights for compensation, though certainly not dispositive, is one factor to consider with respect to whether plaintiff will suffer irreparable harm.

The court further noted that the record evidence indicated that IMX's and Lending Tree's markets were potentially different - IMX's product is a communication forum for brokers and lenders, while LendingTree's product was directed at customers and lenders. Also, while LendingTree employs around 2000 employees, IMX employs less than a dozen employees.

On the other hand, the court found it significant that LendingTree's infringing use of the technology was not limited to a minor component, stating that the use "primarily, if not completely, mimics the patented system."

After careful consideration, the court concluded that more information was needed with regard to balance of hardships and public interest, but nevertheless suggested in a footnote that the court was leaning against the injunction ("[a]lthough it appears that the balance of hardships may weigh against enjoining defendant's use of the LendingTree Exchange, the court declines to make this determination without additional information").

Absent any specific information regarding the effect of defendant's infringing operation of the LendingTree Exchange on plaintiff's business, the court is reluctant to make a determination based solely on the considerations present in the current record. The '947 patent expires in 2017. The court declines to effectively impose a ten-year compulsory license on defendant absent more information, for example, the effects of defendant's infringement on plaintiff's business and of a potential permanent injunction on the public and the marketplace.

See Delaware IP Law Blog here.

Read opinion here.

1 Comentário:

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