Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_11-cv-00774/USCOURTS-cand-3_11-cv-00774-17/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:2201 Declaratory Judgement (Insurance)

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Case No. 5:11-cv-00774-PSG

ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION

SEALANT SYSTEMS INTERNATIONAL, 

INC. et al.,

 

Plaintiffs,

v.

TEK GLOBAL, S.R.L., et al.,

Defendants.

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Case No. 5:11-cv-00774-PSG

ORDER DENYING MOTION TO 

STAY, DENYING MOTION TO 

EXTEND SUNSET PERIOD, AND 

GRANTING MOTION TO MODIFY 

INJUNCTION

(Re: Docket No. 312)

 

 After a jury rendered its verdict on all triable issues, this court enjoined Defendants TEK 

Global S.R.L. and TEK Corporation from various acts found to infringe United States Patent No. 

6,789,581.1 Despite the irreparable harm to Plaintiff Accessories Marketing Inc. supporting the 

permanent injunction, the court also ordered a ninth-month sunset period for TEK to get its affairs 

in order and minimize any unjustified impact on third parties.2 These nine months were on top of 

the 11 months since a jury found that TEK infringed multiple valid patent claims. 20 months are 

not sufficient enough for TEK; TEK now moves for a stay of the injunction altogether or at least an 

extension of the sunset period for another five months so that it may pursue relief from the Federal 

 

1

See Docket No. 284. 

2

See id.

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ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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Circuit.3 TEK’s request for relief from the injunction is not its first—as an alternative to denying 

the injunction outright TEK sought precisely the same stay in opposing the injunction at the 

outset.4 As before, the court finds that neither a stay of the injunction or nor an extension of the 

sunset period is warranted, but that a modest modification to the injunction’s terms is.

I.

 Especially in the aftermath of the Supreme Court’s 2006 decision in eBay v. MercExchange, 

a permanent injunction in a patent case is no mere perfunctory or mechanical exercise. Indeed, as 

the Supreme Court itself emphasized, such injunctions may issue only “in accordance with the 

principles of equity.”5 One tool trial courts may use in applying such principles lies in Fed. R. Civ. 

P. 62(c), which authorizes the suspension or modification of an injunction pending appeal from a 

final judgment granting the injunction.6 

 In deciding whether to suspend or modify an injunction, the court must consider four factors: 

(1) whether the movant has made a strong showing that it is likely to succeed on the merits of its 

appeal; (2) whether the movant will be irreparably injured absent a stay; (3) whether the issuance 

of the stay will substantially injure other parties interested in the proceeding; and (4) the public 

interest.7 While the undersigned has expressed its doubts, other courts have equitably applied these 

 

3

See Docket No. 312 at 2.

4

See Docket No. 258 at 25.

5

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 338, 392 (2006) (citing 35 U.S.C. § 283).

 

6

See Fed. R. Civ. P. 62(c); Fed. R. App. P. 8(a)(1); see also Amado v. Microsoft Corp., 517 F.3d 

1353, 1358 (Fed. Cir. 2008) (observing that district courts “possess broad equitable authority to 

modify injunctions”); Broadcom Corp. v. Emulex Corp., 732 F.3d 1325, 1339 (Fed. Cir. 2013)

(finding that 18-month sunset period was not an abuse of discretion); Broadcom Corp. v. 

Qualcomm Inc., 543 F.3d 683, 704 (Fed. Cir. 2008) (approving injunction including 20-month 

sunset provision); B. Braun Melsungen AG v. Terumo Medical Corp., 778 F. Supp. 2d 506, 524 (D. 

Del. 2011) (issuing injunction with 15-month sunset period).

 

7

See Standard Havens Prods., Inc. v. Gencor Indus., Inc. 897 F.2d 511, 512 (Fed. Cir. 1990) 

(citing Hilton v. Braunskill, 481 U.S. 770, 776 (1987)).

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ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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factors on a “sliding scale,” so that even where the movant only demonstrates a “substantial” 

chance of success on the merits, a stay may be appropriate if the balance of the hardships weigh in 

the movant’s favor. 8Similarly, if the movant is more likely to win on appeal, the balance of harms 

may weigh less heavily in its favor.9 Among other factors, “evidence of employee layoffs, 

immediate insolvency, and possible extinction of a company provide a basis of irreparable harm 

that militates in favor of granting a stay.”10

 While a permanent injunction may have been warranted, this “does not preclude a granting of 

a stay of that injunction pending appeal as both issues require different analyses.”11 Though the 

harm to the alleged infringer receives limited weight in the context of a motion for a permanent 

injunction, the “analysis changes in the context of a request for a stay on appeal because of the 

 

8

See Brocade Commc’ns Sys., Inc. v.A10 Networks, Inc., Case No. 10-CV-3428-PSG, 2013 WL 

557102, at *2 (N.D. Cal. Feb. 12, 2013); cf. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 

1127, 1134 (9th Cir. 2011) (continuing to apply sliding-scale approach after careful consideration 

of Winter). See also Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 51 (2008) (Ginsberg, J., 

dissenting) (“[C]ourts have evaluated claims for equitable relief on a ‘sliding scale,’ sometimes 

awarding relief based on a lower likelihood of harm when the likelihood of success is very high. 

This Court has never rejected that formulation, and I do not believe it does so today”) (citation 

omitted); see also Apple, Inc. v. Samsung Elecs. Co., Case No. 5:12-cv-00630-LHK, 2012 WL

2576136, *2 (N.D. Cal. July 3, 2012) (applying the “sliding scale” approach and noting the court 

“need not . . . give equal weight to each of the four factors”).

9

See Standard Havens Prods., Inc., 897 F.2d at 512.

10 Apple, Inc. v. Samsung Electronics Co., Ltd., Case No. 5:11-cv-01846-LHK, 2012 WL 2527044, 

at * 7 (N.D. Cal. July 2, 2012) (citing Standard Havens Prods., 897 F.2d at 515); In re Hayes 

Microcomputer Prods., Inc. Patent Litig., 766 F. Supp. 818, 823 (1991) (granting stay of injunction 

pending appeal where it appeared “highly likely that, when and if the injunction is finally enforced, 

[defendants would] be forced out of business”).

11 Smith & Nephew, Inc. v. Arthrex, Inc., Case No. 2:07-cv-335-TJW, 2010 WL 2522428, at *5 

(E.D. Tex. June 18, 2010) (holding that “while in the context of awarding a permanent injunction 

the Court finds that the balance of hardships favors [plaintiff], the Court finds that in the context of 

a stay of the permanent injunction pending appeal the balance of hardships favors [defendant]”).

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ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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chance for reversal.”12 Still, the movant must show that the “balance of hardships” against the 

substantial harm to the nonmoving party “tips sharply in [the movant’s] favor.”13

 TEK brought the parties to federal court by charging AMI’s sister company Sealant Systems 

International, Inc. with infringement of TEK’s U.S. Patent No. 7,789,110 in the Southern District 

of New York.14 SSI then sued TEK for a declaratory judgment of noninfringement of the ’110 

patent in this district.15 After AMI purchased U.S. Patent No. 6,789,581 from an unrelated third 

party, AMI’s claim for infringement was added in the first amended complaint.16 SSI then filed a 

second amended complaint adding TEK as a defendant with respect to the claim of infringement.

 After the New York case was transferred here, the cases were consolidated.17 The court 

granted AMI’s motion for summary judgment that it did not infringe the ’110 patent and set the 

remainder of the case for trial.18 A jury found for AMI on the ’581 infringement claims.19 After 

careful consideration of the eBay factors, including TEK’s strenuous claims at trial that the ’581 

patent was not necessary for a successful tire repair kit and could be quickly designed-around, as 

 

12 Extreme Networks, Inc. v. Enterasys Networks, Inc., Case No. 07-cv-229-BBC, 2009 WL 

679602, at *4 (W.D. Wis. Mar. 16, 2009) (granting a stay even though the court “disagree[d] with 

defendant’s challenges to the jury’s verdict,” because “the court of appeals may see things 

differently”).

13 Apple, Inc., 2012 WL 2576136 at *8 (citation and brackets omitted; italics in original).

14 See Docket No. 101-2 at 1.

15 See Docket No. 1.

16 See Docket No. 37.

17 See Docket No. 8.

18 See Docket No. 134 at 18.

19 See Docket No. 217. 

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ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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well as strong evidence of fierce competition between TEK and AMI in the on-board-tire-repair-kit 

market, the court granted AMI’s motion for permanent injunction.20

 The permanent injunction requires TEK and affiliates to cease: (1) making, using, selling, 

offering to sell, or importing in the U.S. any tire repair kit that includes features infringing 

specified claims of the ’581 patent; (2) providing customer service or technical support related to 

those products; and (3) modifying or updating any documentation regarding the operation or use of 

such products.21 To ease the impact of the injunction on both TEK and third parties, a temporary 

sunset provision with various restrictions delays the effect of this permanent injunction for nine 

months, until December 10, 2014.22 During this period, TEK may continue to sell infringing kits 

for certain pre-qualified Original Equipment Manufacturers’ platforms.

23

 TEK has since appealed to the Federal Circuit, claiming that the ’110 claims were improperly 

dismissed, that the ‘581 patent is invalid and that TEK is not infringing.

24

 TEK also appeals the 

permanent injunction, arguing that there was no willful infringement before AMI brought suit, that 

neither AMI nor SSI had practiced the ’581 patent at issue, and that there was no need to restore 

market share to a competitor of TEK.25

 In its opposition to AMI’s permanent injunction motion, TEK initially sought a stay as an 

alternative.26 Relying on what it claims are “changed circumstances” hindering the implementation 

of a non-infringing design that threaten TEK’s very existence, TEK now seeks a stay for the 

 

20 See Docket No. 283 at 48.

21 See Docket No. 284 at 1.

22 See id. at 1-2.

23 See id. at 2.

24 See Docket No. 290.

25 See id.

26 See Docket No. 259 at 25.

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second time, pending a hearing and decision on TEK’s appeal to the Federal Circuit. In the 

alternative, TEK requests that the court extend the injunction’s sunset period until April 10, 2015.27

TEK further requests that the court narrow the sunset provision’s customer certification 

requirement, which requires TEK to obtain agreements to restrict the use of the products from 

customers who have purchased TEK products after April 25, 2013.28

II.

 This court has jurisdiction under 28 U.S.C. § 1338. The parties further consented to the 

jurisdiction of the undersigned magistrate judge under 28 U.S.C. § 636(c) and Fed. R. Civ. P. 

72(a).

 Although this is not is the first time TEK has sought a stay of the injunction pending appeal, 

changed circumstances can justify what is effectively a motion for reconsideration.29 One might 

reasonably question whether at least some of the circumstances TEK points to are truly changed. 

For example, then as now, TEK cites the impact of the injunction on its customers’ willingness to 

consider its infringing products. The court need not resolve that question, however, because even 

if none of the circumstances at issue were known before, a stay of the injunction still is not 

warranted. 

III.

 Standard Havens requires the court to weigh: (1) whether TEK has made a strong showing 

that it is likely to succeed on the merits on appeal; (2) whether the TEK will be irreparably injured 

absent a stay; (3) whether a stay will substantially injury parties other than TEK or AMI with an 

 

27 See Docket No. 312 at 1-2.

28 See id. at 13-14.

29 See Civil L.R. 7-9. 

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interest in this proceeding; and (4) the public interest.30 On the record before the court, even as 

supplemented by TEK with its changed circumstances, all four factors weigh against a stay.

 First, TEK offers nothing new relevant to its potential for success on the merits of its appeal, 

and in line with its previous findings, the court concludes that TEK is unlikely to prevail. Of 

course this is ultimately an issue for the Federal Circuit to resolve for us all. But after many days 

of evidence, argument and deliberation, nine citizens of this district found claims 27-31, 24, 40, 

and 42 were infringed by a preponderance of the evidence.31 That same jury unanimously found 

TEK did not prove invalidity by clear and convincing evidence.32 The court’s 64-page order 

addressing the parties’ various post-trial motions explained that the jury verdict was supported by 

substantial evidence, and nothing TEK presents now suggests otherwise.33 TEK also fails to 

present new evidence to suggest that the court abused its discretion or committed clear error in 

finding the four eBay factors supported issuing the injunction.

 TEK does not seriously dispute that any of its changed circumstances evidence suggests in 

any meaningful way that it is likely to succeed on appeal. It instead presents the same port, 

receptacle, reservoir and causal nexus arguments as it did before. Significantly, as to all but one 

 

30 Standard Havens Prods., Inc., 897 F.2d at 512.

31 See Docket No. 283 at 8-10.

32 See id at 16.

33 See Enovsys LLC v. Nextel Comms., Inc., 614 F.3d 1333, 1341 (Fed. Cir. 2010) (“a jury verdict 

‘must be upheld if it is supported by substantial evidence . . . even if it is also possible to draw a 

contrary conclusion’”) (citation omitted); Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 563 

F.3d 1358, 1370-71 (Fed. Cir. 2009) (finding substantial evidence is “relevant evidence reasonable 

minds might accept as adequate to support the jury’s conclusion . . . A court will not weigh the 

evidence or assess the credibility of witnesses in determining whether substantial evidence exists”); 

Boehringer Ingelheim Vetmedica, Inc. v. Schering- Plough Corp., 320 F.3d 1339, 1350 (Fed. Cir. 

2003) (holding the court “must draw all reasonable inferences in favor of the nonmoving party . . . 

[and] disregard all evidence favorable to the moving party that the jury was not required to 

believe”); Door-Master Corp. v. Yorktowne, Inc., 256 F.3d 1308, 1312 (Fed. Cir. 2001) (“Where, 

as here, a jury finds a patent valid,” the Federal Circuit “will not disturb that finding unless 

reasonable jurors could not have reached that verdict”).

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ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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claim—claim 42—TEK challenges only the jury finding of no anticipation, but not nonobviousness or infringement. As the court explained at length in its order, substantial evidence 

including expert testimony from not only AMI, but also TEK itself, supports the jury’s findings.

34

 Second, as to TEK’s irreparable injury, TEK has not offered sufficient evidence that goes 

beyond its mere allegations. TEK leans heavily on the suggestion that testing and validation for 

OEM customers has proven slower than previously anticipated and that no OEM customer will buy 

a product that is not globally compliant, precluding any non-infringing alternative for the U.S. 

market alone.35 TEK also points to layoffs it has already suffered contemporaneously with the 

switch of one OEM to a non-infringing substitute.

36

 But even if this was not anticipated when TEK 

first raised the possibility of a stay, and there was sufficient evidence in the record to substantiate 

the causation beyond the correlation that it claims, harm from avoiding infringement has long been 

recognized as an insufficient basis for staying an injunction.37 It does not matter that TEK’s 

infringement was not found to be willful.38 Over the 20 months between the verdict and the 

expiration of the sunset period, all OEMs have had plenty of opportunity to stock up on TEK 

products during that period to manage until the redesigned product is completely ready to go.

 

34 See Docket No. 283.

35 See Docket No. 312-1 at ¶ 12-14.

36 See id. at ¶ 16.

37 See, e.g., Stryker Corp. v. Zimmer Inc., Case No. 1:10-cv-1223, 2013 WL 6231533, at *26 (W.D. 

Mich. Aug. 7, 2013) (“an immediate injunction will only injure Zimmer to the extent Zimmer will 

no longer be allowed to infringe Stryker’s patents, something it had no right to do in the first 

place”).

38 In support of its argument to the contrary, TEK cites to Grain Processing Corp. v. Am. MaizeProducts Co., 185 F.3d 1341, 1353 (Fed. Cir. 1999). But Grain Processing was an opinion about 

lost profits, not its permanent injunctions. In any event, while noting that TEK’s claimed hardships 

come from its infringement, the court has hardly “disregarded them altogether,” Smith & Nephew, 

Inc. v. Interlace Med., Inc., 955 F. Supp. 2d 69, 79 (D. Mass. 2013), as TEK suggests. Even as 

recently as late last week, the court accepted additional evidence of hardship tendered by TEK.

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ORDER DENYING MOTION TO STAY, DENYING MOTION TO EXTEND SUNSET 

PERIOD, AND GRANTING MOTION TO MODIFY INJUNCTION

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 TEK claims that once the sunset period ends, it will be unable to sell products in the TEK400 

and TEK500 families that have made up a substantial percentage of TEK Corporation’s revenues 

over the past five years.39 The projected loss of TEK Corporation’s revenue does not, of course, 

reflect what percentage of TEK Global’s revenue is at risk. The record is clear that TEK Global’s 

revenue is more diversified.40 Even as to TEK Corporation, TEK offers only its own speculation 

that it faces a break-up of its OEM business as a result of the denial of the stay, as opposed to the 

entry of the injunction in the first place. The only customer from whom TEK tenders any evidence 

makes clear that it views the date of the injunction as dispositive no matter the entry of the stay.41 

And if anything, TEK’s claims about the centrality of the claimed invention to its revenue stream 

undermine rather than support the argument in favor of a stay. The reason is that such inventions 

do not implicate the concerns raised in Justice Kennedy’s eBay concurrence: “[w]hen the patented 

invention is but a small component of the product the companies seek to produce and the threat of 

an injunction is employed simply for undue leverage in negotiations, legal damages may well be 

sufficient to compensate for the infringement and an injunction may not serve the public 

interest.”42

 TEK itself acknowledges that it has already constructed a prototype of its design-around 

product,43 and the re-designed product should be on the market in the United States by April 

2015,44 another factor pointing toward TEK’s limited harm.

 

39 See Docket No. 312 at 4.

40 Cf. Hynix Semiconductor Inc. v. Rambus Inc., 609 F. Supp. 2d 951, 968 (N.D. Cal. 2009) 

(denying injunction that would "decimate" the infringer's business).

 

41

 See Docket No. 333-4 at 6 ¶ 2.

42 547 U.S. at 396-97.

43 TEK had its prototype ready in August 2013, four months after the jury verdict. See Docket No. 

318 at 14.

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 Third, as to injury to other parties interested in the proceeding, TEK offers no new evidence 

that further delaying the injunction does not injure AMI. At best TEK urges that AMI might suffer 

no greater harm than it is now, especially if OEMs took up AMI’s suggestion that they are free to

stock up during the period of TEK’s remaining sunset period.45 TEK also questions the 

significance of AMI’s harm when it does not practice the ’581 patent and in fact purchased the 

patent only after this litigation was launched.

46

 But TEK’s bootstrapping would require a followon stay anytime even if a one-day sunset period were permitted. Nothing in the case law even hints 

at such an outcome.

 More fundamentally, these arguments take no account of the fundamental nature of the right 

at issue: the right to exclude.47 No matter AMI’s lack of practice of the patent or when AMI 

acquired it, TEK’s ongoing infringement denies AMI of AMI’s right to exclude competitors from 

practicing the ’581 patent’s claims.48 While perhaps less well-remembered than its criticism of the 

Federal Circuit, eBay’s criticism of the district court’s seeming reliance on such distinctions was 

 

44 See Docket No. 312 at 1-2.

45 See Docket No. 315 at 19. TEK replies that AMI’s “is a curious line of argument indeed, 

because it suggests that AMI believes it would not be irreparably harmed (as long as it receives 

royalties on sales of the accused products) if TEK supplies OEMs with the accused products 

beyond December 10, 2014. From AMI’s perspective, it shouldn’t make any difference whether 

OEMs stock up on the accused products prior to December 10, 2014 or continue to order them as 

needed during the appeal period.” See Docket No. 319 at 4.

46 See Docket No. 312 at 1, 10.

47 See Edwards Lifesciences AG v. CoreValve, Inc., 699 F.3d 1305, 1314 (Fed. Cir. 2012) (“A 

patentee’s right to exclude is a fundamental tenet of patent law”).

48

 See Brocade Comms. Systems, Inc., 2013 WL 557102 at *4 (“Because Brocade’s right to 

exclude a direct competitor from practicing its patents cannot be remedied through damages, an 

injunction is appropriate”); see also Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1171 

(Fed. Cir. 2014) (“the fact that Trebro does not presently practice the patent does not detract from 

its likely irreparable harm”).

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just as pronounced. “[T]raditional equitable principles do not permit such broad classifications.”49 

Put another way, whether for Thomas Edison and his light bulb patents or AMI and its off-the-shelf 

purchase, the exclusive rights under 35 U.S.C. § 271 are the same; that period of exclusivity never 

comes back.

 TEK does offer that the court might impose conditions on the stay to temper any alleged 

injury that AMI might suffer. For example, TEK might be permitted to sell the accused products 

during the extended stay period only to existing OEMs and only for the vehicle platforms that were 

qualified and validated by April 25, 2013, with royalties covered by TEK’s $3,500,000 cash 

bond.50 But TEK’s proposed bargain amounts to a compulsory license to that competitor.51 And 

AMI has never licensed the ’581 patent to anyone, let alone a competitor.52

 Other trial courts have held the same in similar circumstances. For example, in Broadcom 

Corp. v. Qualcomm, Inc., the court held that while the patentee’s failure to offer a replacement 

product for the infringing product may affect the degree of competition, an injunction and not 

merely a compulsory license was nevertheless warranted because both firms compete in the same 

market, a market the patent holder should have the opportunity to exploit.

53

 Similarly, in Callaway 

Golf Co. v. Acushnet Co., the court granted a permanent injunction rather than a compulsory 

license because the patentee faced lost market share from the defendant’s ongoing infringement.54 

 

49 eBay Inc., 547 U.S. at 393.

50 See Docket No. 319 at 13.

51 See Paice LLC v. Toyota, 504 F.3d 1293, 1314 (Fed. Cir. 2007) (“Under some circumstances, 

awarding an ongoing royalty for patent infringement in lieu of an injunction may be appropriate”).

52 See Docket No. 315 at 18.

53 Broadcom Corp. v. Qualcomm Inc., Case No. SACV 05–467 JVS-RNBx, 2007 U.S. Dist. 

LEXIS 97647, at *7 (C.D. Cal. Dec. 31, 2007) (Docket No. 995).

54 Callaway Golf Co. v. Acushnet Co., 585 F. Supp. 2d 600, 622 (D. Del. 2008) (vacated on other 

grounds).

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In Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., the court held that “the 

incumbency benefits of Fairchild defeating Power for ‘design wins’ cannot be fully compensated 

by payment of damages.”55 Courts have declined to impose a compulsory license even on patent 

holders who are not presently manufacturing the claimed invention or otherwise actively using the 

patented technology.56 

 Fourth, TEK offer no new evidence that a stay of the injunction would favor the public 

interest. However under attack the right to exclude under a patent may appear in 2014, the public 

interest remains well-served by the enforcement of that right under patents that are valid and 

infringed. 57 The injunction is narrowly tailored and already includes the nine-month sunset 

period.58 Together with the 11 months that preceded the entry of the injunction, the public will 

have been spared whatever ill effects of the injunction for no less than 20 months. While TEK is 

absolutely right that the public has a strong interest in maintaining a competitive market for tire 

repair kits, that market is supported by the capital investments in research and development that 

patents and patent alienability nurture. That an infringing competitor may expand market output 

 

55 Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., Case No. 08-309-LPS, 2014 WL 

2960035, at *1-2 (D. Del. June 30, 2014).

56 See, e.g., Emory Univ. v. Nova BioGenetics, Inc., Case No. 1:06-cv-0141-TWT, 2008 U.S. Dist. 

LEXIS 57642, at *1-2, 11-14 (N.D. Ga. July 24, 2008); Joyal Prods., Inc. v. Johnson Elec. N. Am., 

Inc., Case No. 04-5172-JAP, 2009 U.S. Dist. LEXIS 15531, at *32, 40 (D.N.J. Feb. 26, 2009).

57 See i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 863 (Fed. Cir. 2010) (holding that the 

“touchstone of the public interest factor is whether an injunction, both in scope and effect, strikes a 

workable balance between protecting the patentee’s rights and protecting the public from the 

injunction’s adverse effects”).

58 Cf. Qualcomm Inc., 543 F.3d at 704; Emulex Corp., 732 F.3d at 1339 (approving a sunset period 

that “allowed for time to remove the infringing product from the market without causing significant 

downstream disturbance for OEMs and consumers”); i4i Ltd. P’ship, 598 F.3d at 863 (holding that 

the “touchstone of the public interest factor is whether an injunction, both in scope and effect, 

strikes a workable balance between protecting the patentee’s rights and protecting the public from 

the injunction’s adverse effects”).

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and lower prices in the short run does not change this fundamental market principle in the long 

run.59

 It may be true that come December TEK may no longer help customers and downstream 

users or update documentation or user manuals with respect to its products that infringe. But TEK

offers little evidence that the customers and suppliers themselves face significant disruption from 

these limitations and offers no authority that the speculative effects of an injunction should be 

weighed in the court’s calculation. No imminent monopoly in the market for tire repair kits has 

been suggested, let alone substantiated, and no evidence suggests that with the substantial sunset 

period already in place customers have struggled to transition. If anything, the court must defer to 

testimony of TEK’s Chief Executive Officer Guido Petrelli, who previously declared it “does not 

cause great expense or delay” for OEMs to switch suppliers.60

 TEK alternatively requests that the court extend the sunset provision by five months to allow 

TEK to bring to market a non-infringing alternative amid unanticipated lengthy testing and 

validation required by TEK’s customers.61 TEK predicts this additional testing and validation will 

not be completed until April 10, 2015, potentially leaving TEK with five months in which they are 

unable to sell either the accused products or its design-around, impacting the bulk of their 

revenue.

62

 The problem for TEK is that TEK itself previously confirmed that nine months would 

 

59 See Douglas Dynamics, L.L.C. v. Buyers Prods. Co., 717 F.3d 1336, 1346 (Fed. Cir. 2013); see 

also Winsurfing Int’l, Inc. v. AMF, Inc., 782 F.2d 995, 1003 n.12 (Fed. Cir. 1986) (“One who elects 

to build a business on a product found to infringe cannot be heard to complain if an injunction 

against continuing infringement destroys the business so elected”).

60 Docket No. 259-1 at ¶¶ 5, 7-9.

61 See Docket No. 312 at 1, 10.

62 See id.

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be sufficient.63 There also is no evidence that customers would be harmed in the absence of an 

extension. This is because, as TEK’s own expert declared, an “OEM can cancel and change its 

order from [a] supplier with little difficulty” and “doing so does not cause great expense or delay 

for the OEM.”64 And TEK’s other evidence shows that customer preparations for the injunction 

are well under way.65

 Where TEK does manage to persuade a change is in order is with respect the injunction’s 

customer certification requirement. TEK asks that the requirement be tweaked so that it applies 

only after the date of the permanent injunction’s entry.

66

 As currently drafted, TEK must obtain 

from purchasers post-April 25, 2013 written certification “that the purchased Enjoined Product 

shall be used only as specifically and exclusively identified in an Appendix to this Injunction.”67 

April 25, 2013, the day the jury reached its verdict, is months before the court first entered the 

injunction on March 10, 2014. Even if none of the customer certifications reference purchases 

made before January 2, 2014,68 TEK is right in pointing out that it does not make sense to impose 

restrictions on any customers retroactively. While counting post-verdict sales is important for 

calculating post-verdict, pre-injunction royalties, the separate requirement of a royalty report 

already serves the purpose of verifying the accuracy of TEK’s sunset period royalty payments.

 

63 See Docket No. 303 at 32:22-25 (“the time of the sunset period is fine”); Docket No. 259-1 (“by 

the time the sunset period ends, TEK will be on the market with a newly designed product”); 

Docket No. 259-1 at ¶ 20 (“TEK’s new product is at the prototype stage and should be read within 

the sunset period offered by AMI”).

64 See Docket No. 312 at 4 (citing Docket No. 259-1 at ¶¶ 5, 7-9.

65 See, e.g., Docket No. 333.

66 See Docket No. 312 at 13.

67 See Docket No. 284 at 2; Docket No. 312 at 13.

68 See Docket No. 315 at 22.

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 The court therefore amends the date of the written certification requirement to March 10, 

2014. If AMI finds TEK’s royalty report does not properly verify the accuracy of TEK’s sunset 

period royalty payments, it may of course seek separate relief.

SO ORDERED.

Dated: October 13, 2014

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PAUL S. GREWAL

United States Magistrate Judge

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