In September 2013, Murata filed a patent infringement action alleging that Daifuku infringed three of its patents (the "Original Patents"). A year later, in September 2014, Murata moved to amend its Complaint to add two patents that Murata alleged were also infringed by Daifuku (the "Additional Patents"). Daifuku filed an inter partes review ("IPR") of the Original Patents and then moved to stay the case pending the outcome of the IPRs.
The district court then stayed the case and simultaneously granted permission for leave to amend the complaint to add the Additional Patents. After the PTAB instituted review of the Original Patents, Murata moved to lift the stay with respect to the Additional Patents and moved for a preliminary injunction on the Additional Patents. Daifuku also filed IPRs with respect to the Additional Patents. The district court denied the motion for preliminary injunction as untimely because it declined to lift the stay.
After Murata appealed to the Federal Circuit, the Federal Circuit remanded and asked the district court to re-address the motion for preliminary injunction on the merits. The Federal Circuit found that the district court did not meet the requirements of Federal Rule of Civil Procedure 52 when it denied Murata's motion, specifically holding that "when a district court denies a preliminary injunction motion, it must provide an adequate reason for its decision beyond merely noting that the case has been stayed." Murata Machinery, 2016 WL 4073320, at *5.
On remand, the district court concluded that it had correctly denied the preliminary injunction because of the pending IPRs: "after reexamining the issue, the court concludes that its decision to deny the preliminary injunction was correct. Each of the patents at issue in this case has been submitted and accepted for IPR by the Patent Trial and Appeals Board. Acceptance of the patents for IPR raises a question about the validity of the patents, which is one of the key considerations in determining whether a plaintiff is able to demonstrate a likelihood of success on the merits. As long as the IPRs are pending before the Patent Trial and Appeals Board, the court concludes that Murata will not be able to demonstrate a likelihood of success on the merits. Because a movant cannot be granted a preliminary injunction without showing both a likelihood of success on the merits and irreparable harm, the court concludes that its finding that Murata will not be able to demonstrate a likelihood of success on the merits is sufficient, on its own, for the court to deny a preliminary injunction in this case."
In addition, the district court found that "Murata may not be able to show that the balance of hardships tips in its favor. In a previous order, the court found that Murata would not be unduly prejudiced by a stay pending the results of the IPRs. A finding that Murata will not be unduly prejudiced by the stay weighs against a finding that Murata will experience hardships due to the denial of the preliminary injunction. The fact that the court granted a stay, which was affirmed by the Federal Circuit, is also relevant to the preliminary injunction analysis. The court "ordinarily should not grant both a preliminary injunction and a stay." Proctor & Gamble Co. v. Kraft Foods. Glob., Inc., 549 F.3d 842, 849 (Fed. Cir. 2008). The main reason that a court should not ordinarily grant both a preliminary injunction and a stay time is that the factors that weigh in favor of issuing a stay are often the same factors that weigh against issuing a preliminary injunction. For example, a finding of a substantial issue of patent validity weighs in favor of a stay but against a preliminary injunction."
As a result, the district court determined that the motion for preliminary injunction should be denied a second time based on the pending IPRs and the stay already issued.
Murata Machinery USA, Inc. v. Daifuku Co., LTD., Case No. 2:13-CV-866-DAK (D. Utah Aug. 15, 2016)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.