1

Wireless’s preliminary injunction motion is before the court

under the procedure permitted by Fed. R. Civ. P. 43(e) and is being

decided on the papers, without an evidentiary hearing. See, e.g.,

Jones v. Bush, 122 F.Supp.2d 713, 715 (N.D. Tex.) (Fitzwater, J.),

aff'd, 244 F.3d 134 (5th Cir. 2000) (per curiam) (unpublished table

decision). Briefing was completed on May 15, 2006, when Wireless

filed its reply brief. As permitted by Rule 52(a), the court sets

out its findings of fact and conclusions of law in this memorandum

opinion and order.

 IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

WIRELESS AGENTS, L.L.C., §

 §

Plaintiff- §

Counterdefendant, §

 § Civil Action No. 3:05-CV-0094-D

VS. §

 §

T-MOBILE USA, INC., et al., §

 §

Defendants- §

Counterplaintiffs. §

MEMORANDUM OPINION

 AND ORDER 

In this patent infringement action concerning United States

Patent No. 6,665,173 (“the ‘173 patent”) entitled, “Physical

Configuration of a Hand-Held Electronic Communication Device,”

plaintiff-counterdefendant Wireless Agents, L.L.C. (“Wireless”)

moves for a preliminary injunction, presenting the dispositive

question whether it will suffer irreparable harm if an injunction

is not granted. Affording Wireless a presumption of irreparable

harm and concluding that defendants-counterplaintiffs have rebutted

the presumption, the court holds that Wireless will not suffer

irreparable harm and denies the motion.1

 

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2

In its first amended complaint, Wireless identifies the

accused devices as the “Sidekick,” the “Sidekick II,” the “hiptop,”

and the “hiptop2.” 1st Am. Compl. ¶ 12. On the present record,

however, it appears that “hiptop” and “hiptop2" are alternative

brand names for the Sidekick and Sidekick II devices and that there

are thus two accused devices rather than four.

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I

Wireless sues defendants-counterplaintiffs T-Mobile USA, Inc.

(“T-Mobile”), Danger, Inc. (“Danger”), and Sharp Corporation

(“Sharp”) for infringing the ‘173 patent based on defendants’

manufacture and sale of the Sidekick line of devices, comprising

the Sidekick and the Sidekick II.2 Defendants assert, inter alia,

the affirmative defense of patent invalidity, and they bring

counterclaims for non-infringement and invalidity.

Wireless is the patentee and owner of the ‘173 patent.

Wireless does not itself manufacture or sell the patented

invention. Rather, it has a program of patent licensing and

enforcement, whereby it seeks to license rights under the patent to

manufacturers and resellers and enforces its patent rights against

infringers.

T-Mobile is a wireless-communications company that sells

communications devices and provides wireless voice and data

services. Danger is a technology company that designs mobile

communications devices and the software platforms that run them.

Sharp is a consumer-electronics manufacturer.

The Sidekick was publicly released in October 2002, over one

 

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year before the ‘173 patent issued, and was sold until the Sidekick

II was introduced in September 2004. Danger designed the original

Sidekick device and had it manufactured by subcontractors. Sharp,

under license from Danger, manufactures the Sidekick II and sells

it to T-Mobile, who in turn brands the devices with the “Sidekick”

name and sells them to consumers for use on T-Mobile’s wireless

voice and data network. Danger provides device software to Sharp

and provides email services to T-Mobile for use on the Sidekick

devices.

The ‘173 patent issued on December 16, 2003. Wireless became

aware of the Sidekick device no later than January 2004, at which

time Wireless contacted Danger and stated its belief that they had

“overlapping intellectual property.” Ds. App. 21-22. Wireless did

not file suit against defendants until January 15, 2005, and it did

not file the motion for preliminary injunction until February 1,

2006, more than one year after filing suit and more than two years

after learning about the accused Sidekick device.

II

In a patent infringement case, the decision whether to issue

a preliminary injunction is within the court’s discretion.

Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350

(Fed. Cir. 2001); Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d

1566, 1568 (Fed. Cir. 1993). “A preliminary injunction is a

‘drastic and extraordinary remedy that is not to be routinely

 

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granted.’” Nat'l Steel Car, Ltd. v. Canadian Pac. Ry., Ltd., 357

F.3d 1319, 1324 (Fed. Cir. 2004) (quoting Intel Corp., 995 F.2d at

1568). In deciding whether to grant Wireless’s motion, the court

considers (1) whether Wireless has demonstrated a reasonable

likelihood of success on the merits, (2) whether Wireless will

suffer irreparable harm if an injunction is not granted, (3)

whether the balance of hardships tips in Wireless’s favor, and (4)

whether and to what extent granting the injunction would have a

positive impact on the public interest. See Amazon.com, 239 F.3d

at 1350. No individual factor is dispositive, and the court “must

weigh and measure each factor against the other factors and against

the form and magnitude of the relief requested.” Id. For the

preliminary injunction to issue, however, Wireless must establish

each of the first two elements. See id.

For reasons of judicial economy and aid of appellate review,

the court generally analyzes all four factors in deciding a

preliminary injunction motion. Polymer Techs., Inc. v. Bridwell,

103 F.3d 970, 973 (Fed. Cir. 1996) (quoting Reebok Int’l Ltd. v.

Baker, Inc., 32 F.3d 1552, 1557 (Fed. Cir. 1994)). More limited

analysis, however, may support the court’s denial of a preliminary

injunction. Id. For example, the “court need not make findings

concerning the third and fourth factors if [Wireless] fails to

establish either of the first two factors.” Id. at 973-74 (citing

Reebok Int’l, 32 F.3d at 1556).

 

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“Because of the very nature of a patent, which provides the

right to exclude, infringement of a valid patent inherently causes

irreparable harm in the absence of [certain] exceptions.” Id. at

975 (internal citation omitted). Thus if Wireless clearly

establishes likelihood of success on the merits, it is entitled to

a presumption of irreparable harm. See Pfizer, Inc. v. Teva

Pharms. USA, Inc., 429 F.3d 1364, 1381 (Fed. Cir. 2005); Reebok

Int’l, 32 F.3d at 1556. The presumption, however, is rebuttable.

See, e.g., Reebok Int’l, 32 F.3d at 1556. “The presumption of

irreparable harm acts ‘as a procedural device which places the

ultimate burden of production on the question of irreparable harm

onto the alleged infringer.’” Polymer Techs., 103 F.3d at 974

(quoting id. at 1556). If the court affords Wireless the benefit

of the presumption and concludes that defendants have rebutted it,

the court need not decide whether Wireless has demonstrated

likelihood of success on the merits. Id. at 974 (citing Reebok

Int’l, 32 F.3d at 1557).

III

A

The court assumes arguendo that Wireless has clearly

demonstrated a likelihood of success on the merits, thereby

creating a presumption that it will be irreparably harmed unless a

preliminary injunction issues. The presumption of irreparable harm

places the burden on defendants to adduce sufficient evidence to

 

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rebut the presumption. Id.

Various types of evidence have been found

sufficient for this purpose. For example, the

presumption may be rebutted by evidence that

(1) the non-movant has or will soon cease the

allegedly infringing activities, thus making

an injunction unnecessary; (2) movants have

engaged in a pattern of granting licenses

under the patent, such that it may be

reasonable to expect that invasion of the

patent right can be recompensed with a royalty

rather than with an injunction; or (3) movants

unduly delayed in bringing suit, thereby

negating the idea of irreparability.

Id. (internal citations omitted).

In its brief in support of its preliminary injunction motion,

Wireless relies principally on the presumption of irreparable harm,

but it also maintains that it is suffering actual irreparable harm

to its negotiating position in its discussions with other

manufacturers over potential licenses. Wireless avers that it is

currently negotiating licenses of the ‘173 patent with several

device manufacturers and resellers and that its negotiating

position is harmed by defendants’ continued infringement

accompanied by a refusal to negotiate in good faith, “because it

demonstrates to other potential licensees that a competitor can

refuse a license but still continue violating the ‘173 [p]atent

with impunity.” P. Br. 30. 

Defendants contend the presumption of irreparable harm is

rebutted because Wireless’s alleged harm to its licensing efforts

does not constitute irreparable harm as a matter of law, since the

 

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presumption does not arise until the plaintiff has made a clear

showing of validity and infringement; and, even if Wireless is

entitled to the presumption of irreparable harm, the presumption

has been conclusively rebutted because harm to licensing efforts

does not constitute irreparable harm as a matter of law, Wireless

has not demonstrated any such harm, and Wireless’s extraordinary

delay in seeking a preliminary injunction precludes a finding of

irreparable harm.

B

The court first considers the effect of Wireless’s licensing

efforts on the presumption of irreparable harm. A patentee’s

granting of a non-exclusive license is “incompatible with the

emphasis on the right to exclude that is the basis for the

presumption in a proper case.” T.J. Smith & Nephew Ltd. v. Consol.

Med. Equip., Inc., 821 F.2d 646, 648 (Fed. Cir. 1987). The offer

of a license demonstrates that the patentee “is willing to forgo

its patent rights for compensation” and “suggests that any injury

suffered by [the patentee] would be compensable in damages assessed

as part of the final judgment in the case.” High Tech Med.

Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551, 1557

(Fed. Cir. 1995). It is the type of evidence that has been found

sufficient to rebut the presumption of irreparable harm. Polymer

Techs., 103 F.3d at 974.

Wireless does not itself manufacture the patented invention;

 

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indeed, it lacks the capacity to do so. P. Reply Br. 22. Rather,

Wireless’s business includes “a program of patent licensing and

enforcement.” P. Br. 30. Wireless avers in its initial brief that

it “is currently negotiating such licenses with several device

manufacturers and resellers.” Id. Wireless’s willingness to

license the ‘173 patent on a non-exclusive basis suggests that it

is willing to accept royalties in lieu of exclusion.

Wireless asserts in its reply brief that the right to exclude

is more critical in the early stages of a new product category

because a “first-mover” is often able to entrench itself when early

customers have no choice but the first-mover’s products. Wireless

alleges that it was on the leading edge of designing new handheld

mobile computing devices that overcame the data entry and output

problems associated with previous devices. It avers that it has

pending patent applications for a system to deliver content to

these devices and maintains that it must be able to license its

patents to first-movers and provide them with exclusive rights to

manufacture and sell the invention. Wireless argues that if

defendants are permitted to continue manufacturing and selling

infringing devices during the course of the litigation, the

infringing devices will become entrenched, and Wireless will lose

its ability to guide the market for its invention, license its new

technology related to content delivery, or leverage its

relationships with its licensees to expand the uses of its

 

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invention. Wireless posits that this cannot be remedied by

damages.

Wireless’s argument might have more bearing to this case if

the invention’s product category were actually in its early stages.

But defendants began selling one of the accused devices in October

2002, and several other devices that Wireless contends infringe the

‘173 patent have been and continue to be manufactured and sold, as

evidenced by Wireless’s other pending lawsuits in this court. See

Wireless Agents, L.L.C. v. Sony Ericsson Mobile Commc’ns AB, No.

3:05-CV-0289-D (N.D. Tex.); Wireless Agents, L.L.C. v. Kyocera

Wireless Corp., No. 3:05-CV-0290-D (N.D. Tex.). Moreover, if

defendants’ devices have become or are becoming entrenched, it is

due in part to Wireless’s own undue delay in bringing this suit and

in seeking a preliminary injunction, as the court explains below.

Wireless admits that at this point it is not seeking to

license the ‘173 patent on an exclusive basis; rather, since the

patent issued in December 2003 Wireless has “sought to . . .

licens[e] rights under the ‘173 [p]atent to several computing

device manufacturers and resellers, P. Br. 2 (emphasis added), it

is “currently negotiating . . . licenses with several device

manufacturers and resellers,” id. at 30 (emphasis added), and it

desires to “leverage its relationships with its licensees,” P.

Reply Br. 23. The intended result of a “program of patent

licensing,” P. Br. 30, would be royalties. If an infringing

 

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manufacturer or reseller refuses to pay Wireless for a license,

Wireless may be recompensed for its loss of royalties through

damages in a successful infringement action. Because Wireless can

recover through damages what it seeks from its licensing

efforts——royalties from a non-exclusive license——the court holds

that defendants have rebutted the presumption of irreparable harm.

See Polymer Techs., 103 F.3d at 974.

C

Defendants additionally maintain that Wireless’s delay in

seeking a preliminary injunction rebuts the presumption of

irreparable harm. “[D]elay in seeking a remedy is an important

factor bearing on the need for a preliminary injunction.” High

Tech Med. Instrumentation, 49 F.3d at 1557. “Absent a good

explanation, . . . a substantial period of delay . . . militates

against the issuance of a preliminary injunction by demonstrating

that there is no apparent urgency to the request for injunctive

relief.” Id. Evidence of an undue delay in bringing suit may be

sufficient to rebut the presumption of irreparable harm. See

Polymer Techs., 103 F.3d at 974.

Defendants submit evidence demonstrating that Wireless became

aware of the accused devices no later than January 2004. Robert

Kay (“Kay”), one of the inventors listed on the ‘173 patent, sent

Danger an email on January 11, 2004 stating that he was aware of

Danger’s Sidekick device and indicating that Danger and Wireless

 

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had “overlapping intellectual property.” D. App. 21-22. Kay was

so surprised by the similarity between Danger’s patent and his own

that he stated in the email: “I don’t know how both patents

issued.” Id. at 22. Wireless’s counsel also sent Danger a January

15, 2004 letter discussing the ‘173 patent and asking to “meet and

discuss a business arrangement regarding [their] technology.” Id.

at 45-46.

Although Wireless knew of the Sidekick device as early as

January 2004, it nonetheless did not file this action until January

15, 2005, one year later. Wireless did not file the present motion

until February 1, 2006, over one year after filing suit and over

two years after first learning about the Sidekick device.

Wireless contends in its reply brief that it has a good

explanation for the delay: it was caused by defendants’ counsel.

Wireless avers that it repeatedly contacted Danger and its counsel

to meet and confer, Danger’s counsel continuously promised

meaningful talks and then came up with excuses why they could not

occur, moving for a preliminary injunction in light of Danger’s

counsel’s promises to negotiate in good faith would not have been

a wise business decision, and Wireless did not move for preliminary

injunctive relief “as a token of its own good faith.” P. Reply Br.

24. Beyond these statements in its brief, however, Wireless does

not direct the court to evidence that defendants are responsible

for the delay, nor does it seek leave to file with its reply brief

 

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a supplemental appendix containing such evidence. Even if Wireless

did proffer evidence that defendants repeatedly promised and

postponed substantive negotiations, and even if this evidence would

justify some delay in seeking injunctive relief, it would certainly

not support Wireless’s delay of over one year from the time of

filing suit until seeking a preliminary injunction. Wireless’s

undue delay “demonstrat[es] that there is no apparent urgency to

the request for injunctive relief,” High Tech Med. Instrumentation,

49 F.3d at 1557, and is of itself sufficient to rebut the

presumption of irreparable harm, see Polymer Techs., 103 F.3d at

974.

D

Even if neither Wireless’s licensing efforts nor its delay in

seeking injunctive relief is alone sufficient to rebut the

presumption of irreparable harm, the court holds that the

presumption is rebutted when these circumstances are viewed

together. Cf. T.J. Smith, 821 F.2d at 648 (stating presumption of

irreparable harm rebutted by 15-month delay in seeking preliminary

injunction and grant of licenses).

Affording Wireless the benefit of the presumption of

irreparable harm, the court concludes that defendants have rebutted

the presumption and that Wireless will not suffer irreparable harm

from the denial of a preliminary injunction. Because this

conclusion is sufficient to deny Wireless’s motion, the court does

 

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not reach the remaining factors. Polymer Techs., 103 F.3d at 973-

74 (“[A] trial court need not make findings concerning the third

and fourth factors if the moving party fails to establish either of

the first two factors. Similarly, a trial court need not make a

finding on a movant’s likelihood of success on the merits if it

affords the movant the benefit of the presumption of irreparable

harm and properly finds that presumption rebutted by the nonmovant.” (internal citations omitted)).

IV

Wireless filed on May 26, 2006 a motion for leave to submit

rebuttal expert report. Wireless seeks leave to submit the report

of Gerhard Deffner, Ph.D. (“Dr. Deffner”), in order to rebut the

expert report defendants submitted with their response to the

preliminary injunction motion. Dr. Deffner’s report relates only

to issues associated with Wireless’s likelihood of success on the

merits. Because the court does not reach this factor in denying

Wireless’s motion for preliminary injunction, the court denies as

moot Wireless’s motion for leave to submit Dr. Deffner’s report.

Wireless filed on June 1, 2006 a motion for evidentiary

hearing on its motion for preliminary injunction and on claim

construction. For similar reasons as make it unnecessary to

consider Dr. Deffner’s report, and because a hearing is unnecessary

under the provisions of the court’s February 2, 2006 order, the

motion is denied.

 

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* * *

Wireless’s February 1, 2006 motion for preliminary injunction

is denied.

SO ORDERED.

June 6, 2006.

_________________________________

SIDNEY A. FITZWATER

UNITED STATES DISTRICT JUDGE

 

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