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Contempt Motion Granted Where Defendant Offered to Sell Its Infringing Product After Entry of a Permanent Injunction

Plaintiffs and defendant manufacture machines that automatically inspect integrated circuits made on semiconductor wafers. Plaintiffs sued defendant for patent infringement and a jury found that the patent was valid and infringed, but did not find that the infringement was willful.

After the jury verdict, the defendant notified its sales force of the verdict and emphasized that the process was not over and that no judgment had been entered. Plaintiffs notified the defendant that it would consider any sales that occurred after the jury verdict evidence of willful infringement. Several months later, the district court denied defendant’s post-trial motions and entered judgment for plaintiffs based on the jury verdict. The district court also entered a permanent injunction. Despite the permanent injunction, the defendant continued to sell the infringing product by meeting with potential customers in the United States who planned to use the machine in other parts of the world. The plaintiffs moved for contempt.

The court noted that the permanent injunction specifically prohibited defendant from “communicating with third parties (in person, via phone, via email or by any other means) located in the United States for the purposes of offering to sell … notwithstanding where the third party intends to use the machines.” Defendant asserted that the injunction was not violated or exceeded the court’s powers because the United States patent laws do not reach an offer made in the United States to sell a product for delivery overseas.

The court disagreed with the defendant, finding that the injunction prohibited communications with third parties located in the United States for the purpose of offering to sell the defendant’s machines that may be used in the United States or elsewhere. “The ‘notwithstanding clause explicitly contemplates sales of machines that may be delivered outside the United States.”

Defendant also argued that the “notwithstanding clause” barring communications in the United States related to foreign sales exceeded the court’s jurisdiction. The court disagreed with this position as well finding that this argument had previously been rejected by the district court and that defendant had to comply with the permanent injunction. “Defendant argues, in essence, that it cannot be held in contempt of the court’s injunction unless overseas … sales infringe plaintiffs’ patent. But that is not the court’ inquiry. The issues is not whether overseas sales infringe, but rather, whether defendant’s conduct in pursuing and making those sales violated the injunction.”
Accordingly, the court found defendant in contempt of court and ordered the defendant to pay plaintiff’s profits, double damages and attorneys’ fees.

August Technology Corp. v. Camtek Ltd., Case No. 05-1396 MJD/AJB (D. Minn. Aug. 11, 2011)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or