Opinion ID: 676602
Heading Depth: 2
Heading Rank: 2

Heading: Irreparable Harm: Proof and Presumption

Text: 24 The patent statute provides injunctive relief to preserve the legal interests of the parties against future infringement which may have market effects never fully compensable in money. Hybritech, 849 F.2d at 1457, 7 USPQ2d at 1200. Because the principal value of a patent is its statutory right to exclude, the nature of the patent grant weighs against holding that monetary damages will always suffice to make the patentee whole. Id., 849 F.2d at 1200, 7 USPQ2d at 1200. 25 (i) Harm to Reebok's Reputation 26 Reebok has not shown, however, that even if it receives the benefit of the presumption of irreparable harm, the district court abused its discretion by denying the preliminary injunction. Reebok submitted the declarations of its in-house patent counsel and its vice-president, each of whom asserted that Baker's sale of infringing footwear will cause irreparable injury to Reebok's reputation because the public might mistakenly believe the inferior quality Olympian shoe to be a Reebok product. To support this assertion, Reebok insisted that the SHAQ I shoe is still being sold in retail outlets, but provided no evidence on the extent of such sales. In fact, at the hearing before the district court, Reebok admitted that it did not have any sense of how many SHAQ I shoes were still available in the retail market. Therefore, the district court's implied finding that Reebok failed to prove the number was more than de minimis is not clearly erroneous. Although it made no explicit finding, we may affirm implied findings that are supported by adequate evidence. ACS Hosp. Sys., Inc. v. Montefiore Hosp., 732 F.2d 1572, 1578, 221 USPQ 929, 933 (Fed.Cir.1984) (We examine the record in order to review the trial court's judgment, and the findings it made or necessarily had to have made to support that judgment....). 27 In contrast, Baker presented sufficient evidence to rebut a presumption that Reebok would suffer harm that could not be fully compensated by money. Baker established, and the district court properly found, that Reebok no longer produces the SHAQ I shoe. In addition, Baker submitted the December 22, 1993, declaration of Daniel Berkowitz, Manager of Product Development for Baker, stating: 28 Over the last month, I have visited numerous stores in the Boston area that sell Reebok athletic shoes. I found that those stores no longer carry the SHAQ I or had very few of the SHAQ I shoes in stock.... I also found that the large promotional displays for the SHAQ I (a life-size stand-up display of Shaquille O'Neal holding the SHAQ I shoe in his size) that used to appear at these stores were no longer being used.... I spoke with several sales clerks at these stores, and was told that the SHAQ I was no longer available and that the SHAQ II was the replacement model for the SHAQ I. 29 Reebok does not contest that very few SHAQ I shoes are available for sale or that Reebok no longer advertises that model. 30 Harm to reputation resulting from confusion between an inferior accused product and a patentee's superior product is a type of harm that is often not fully compensable by money because the damages caused are speculative and difficult to measure. However, such confusion is unlikely to occur or may be de minimis once the patentee stops making and advertising its product embodying the patent and its distributors have nearly ceased selling any. Future purchasers of Baker's Olympian model shoe would not likely confuse that shoe with the SHAQ I model based on advertising or displays of the SHAQ I in retail stores because Reebok and its distributors, some time before the ruling appealed, stopped all advertising and ceased selling that model to beyond a de minimus extent. Moreover, Reebok has not explained how such confusion could occur. Thus, we conclude Baker has shown that Reebok's reputation will not be materially harmed by the sale of a relatively small number of Olympian shoes and, therefore, effects of Baker's sales of the remaining Olympians would be fully compensable by money damages. The district court's finding of no irreparable harm is not clearly erroneous. 3 31 (ii) Other Arguments 32 Reebok also argues that its right to exclude establishes irreparable harm because it will forever lose that right for the current time period if Baker is not excluded from the marketplace through a preliminary injunction. We reject this argument. Application of a concept that every patentee is always irreparably harmed by an alleged infringer's pretrial sales would ... disserve the patent system. Illinois Tool Works, 906 F.2d at 683, 15 USPQ2d at 1310 (emphasis in original). In Illinois Tool we rejected the patentee's argument that potential lost sales alone could demonstrate manifest irreparable harm because acceptance of that position would require a finding of irreparable harm to every patentee, regardless of the circumstances. Id., 906 F.2d at 683, 15 USPQ2d at 1310. See also Rosemount, 910 F.2d at 822, 15 USPQ2d at 1572 (rejecting the argument that the presumption of irreparable harm can be overcome only by evidence that the accused product is no longer being imported, but not by evidence of the actual damage caused). Moreover, if the right to exclude during the litigation period alone established irreparable harm, the presumption of irreparable harm stemming from a finding of likely success could never be rebutted, for every patentee whose motion for a preliminary injunction is denied loses the right to exclude an accused infringer from the market place pending the trial. 33 For these reasons, we conclude the district court properly found that any harm which Reebok suffers due to Baker's selling the remaining 33,000 Olympian shoes can be fully compensated by money damages. Even granting Reebok the presumption of irreparable harm, it has been successfully rebutted.