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District Court Grants Permanent Injunction after Summary Judgment Ruling in Favor of Patent Holder Where Defendant Was Direct Competitor and Patent Holder Had Lost Sales and Market Share

After the district court granted the plaintiff’s motion for summary judgment of patent infringement, the district court addressed whether a permanent injunction was appropriate. The patent at issue, U.S. Patent No. 6,065,794 (‘794 Patent), which is titled “Security Enclosure for Open Deck Vehicles,” relates to storage management devices, or “trunk enclosures,” that partition and establish a lockable trunk in the rear of convertible cars.

The district court then proceeded to address the four factor for determining whether an injunction should issue. Addressing irreparable harm, the plaintiff argued that it had suffered and will continue to suffer irreparable harm as a result of the defendant’s infringement because the defendant is a direct competitor and the plaintiff has lost sales and market share due to Defendant’s infringement. In response, the defendant argued that the plaintiff could not show irreparable harm because it had not demonstrated that customers purchase the infringing devices because of the patented features and therefore, the plaintiff had failed to satisfy the “causal nexus” requirement.

The district court disagreed that this was the appropriate analysis of the causal nexus requirement. “But this argument is flawed, as it relies on an incorrect standard for the causal nexus inquiry. The Federal Circuit recently addressed the causal nexus requirement and held that it is not necessary to show that the infringing features “drive consumer demand for [the defendant’s] infringing products.” Apple, 809 F.3d at 641. Rather, the Federal Circuit clarified that the causal nexus text is a flexible analysis and a patentee need only show ‘some connection’ between the patented features and the demand for the infringing products.”

The district court also found that the second factor, the inadequacy of monetary damages, also favored the plaintiff as “[t]he essential attribute of a patent is that it provides a right to exclude competitors from infringing” and here the plaintiff had not licensed its patent. The district court also disregarded the defendant’s statement regarding a new design as the defendant would remain free to return to the old, infringing design absent a permanent injunction.

On the balance of hardships factor, the district court also found in favor of the plaintiff. “Where, as here, Defendant’s infringement has “forc[ed] [Plaintiff] to compete against its own patented invention,” there is substantial hardship on Plaintiff. Id. at 646. Moreover, Defendant’s recently submitted status report states Defendant has already undertaken efforts to take the infringing products out of distribution. The Court finds that the harm caused by future infringement outweighs any hardship that Defendant may experience. Therefore, this factor weighs in favor of Plaintiff.”

Finally, the district court found that the fourth factor, the public interest, also favored an injunction. “As this Court has stated, however, although the public often benefits from ‘healthy competition,’ the public “generally does not benefit when [] competition comes at the expense of a patentee’s investment-backed property right.” (Dkt. 175, at 3 (citing Apple Inc., 809 F.3d at 647).) Moreover, ‘public policy favors the enforcement of patent rights.’ Abbott Labs. v. Andrx Pharms., Inc. 452 F.3d 1331, 1348 (Fed. Cir. 2006). In light of the finding of infringement, the public interest will not be disserved by a permanent injunction because it allows Plaintiff to enforce its patent rights. This factor thus supports Plaintiff’s motion for a permanent injunction.”

Accordingly, the district court granted the motion for permanent injunction.

Bestop, Inc. v. Tuffy Security Products, Inc
., Case No. 13-10759 (E.D. Mich. April 29, 2016)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or