Opinion ID: 209409
Heading Depth: 3
Heading Rank: 1

Heading: Irreparable Harm and Lack of Adequate Remedy at Law

Text: Stryker first argues that the district court erred in giving no weight to Acumed's previous decisions to license the '444 patent to two large competitors, Smith & Nephew and Zimmer. Stryker asserts that Acumed's past willingness to grant licenses, especially to settle litigation with Smith & Nephew during which Acumed also pursued a permanent injunction, demonstrates that money damages in the form of a reasonable royalty are an adequate remedy. Stryker argues that the court improperly failed to estop Acumed from arguing that it had not licensed its patent to a direct competitor. Stryker also asserts that the court erred by relying on the analyses of three inapposite district court cases, TiVo Inc. v. EchoStar Communications Corp., 446 F.Supp.2d 664 (E.D.Tex.2006), Smith & Nephew, Inc. v. Synthes, 466 F.Supp.2d 978 (W.D.Tenn.2006), and Visto Corp. v. Seven Networks, Inc., No. 2:03-CV-333-TJW, 2006 WL 3741891 (E.D.Tex. Dec. 19, 2006). In response, Acumed argues that the amount of weight given to a patentee's prior willingness to grant licenses is solely within the discretion of the district court. Acumed asserts that it has a legitimate business interest in preventing the irreparable harm that would be caused by Stryker. Acumed argues that the lost profits award by the jury necessarily means that direct competition existed between Stryker and Acumed, which shows the existence of irreparable harm with no adequate legal remedy. Finally, Acumed argues that whether the court chose to follow the three district court cases, which were on point, was well within the court's discretion. We agree with Acumed that the district court did not abuse its discretion. The essential attribute of a patent grant is that it provides a right to exclude competitors from infringing the patent. 35 U.S.C. § 154(a)(1) (2000). In view of that right, infringement may cause a patentee irreparable harm not remediable by a reasonable royalty. While the fact that a patentee has previously chosen to license the patent may indicate that a reasonable royalty does compensate for an infringement, that is but one factor for the district court to consider. The fact of the grant of previous licenses, the identity of the past licensees, the experience in the market since the licenses were granted, and the identity of the new infringer all may affect the district court's discretionary decision concerning whether a reasonable royalty from an infringer constitutes damages adequate to compensate for the infringement. The district court here weighed these factors and determined, consistent with eBay, that money damages constituted adequate compensation only for Stryker's past infringement and that no adequate remedy at law existed for Stryker's future infringement. Thus, the district court concluded that an injunction was needed. Contrary to Stryker's argument that the district court assigned no weight to the two licenses granted by Acumed, the court considered the previous licenses and distinguished them, albeit briefly, from the circumstances of this case. See Injunction Opinion, 2007 WL 4180682, at , 2007 U.S. Dist. LEXIS 86866, at - (In addition, Acumed points out it licensed the '444 Patent to Smith & Nephew as part of the settlement of an action against Smith & Nephew. Also, when Acumed licensed the '444 Patent to Zimmer, it was not a direct competitor of Acumed.). Absent clear error of judgment, which is not evident here, the weight accorded to the prior licenses falls squarely within the discretion of the court. A plaintiff's past willingness to license its patent is not sufficient per se to establish lack of irreparable harm if a new infringer were licensed. See eBay, 547 U.S. at 393, 126 S.Ct. 1837 (rejecting the district court's conclusion that a plaintiff's willingness to license its patents and its lack of commercial activity in practicing the patents would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue) (quotations omitted); see also Smith & Nephew, 466 F.Supp.2d at 983 (quoting eBay ). Adding a new competitor to the market may create an irreparable harm that the prior licenses did not. In this case, the fact that Acumed licensed the '444 patent under two particular sets of circumstances does not mean that the district court abused its discretion in not holding that Acumed must now grant a further license to Stryker and receive only a royalty as compensation. [] Furthermore, it was not an abuse of discretion for the district court to have declined to distinguish prior cases in the manner desired by Stryker. The district courts in TiVo, Visto, and Smith & Nephew all granted permanent injunctions after the eBay decision, and the court in the instant case discussed and quoted all three at length when considering Acumed's argument about lost market share causing irreparable injury with no adequate remedy at law. Injunction Opinion, 2007 WL 4180682, at -6, 2007 U.S. Dist. LEXIS 86866, at -. Stryker argues that Acumed had previously licensed the '444 patent, unlike the patentees in the three prior cases, and that the court abused its discretion by failing to distinguish the instant action for this reason. However, the court clearly did consider Stryker's argument. See Injunction Opinion, 2007 WL 4180682, , 2007 U.S. Dist. LEXIS 86866, at  (In support of their position, Defendants point out that Acumed licensed the '444 Patent to Zimmer and to Smith & Nephew, two of Acumed's competitors.). The court simply did not find this argument persuasive. We see no abuse of discretion, as there was no error of law or clearly erroneous factual finding in the court's treatment of those cases. Thus the court did not abuse its discretion in finding that Acumed suffered irreparable harm from Stryker's infringement with no adequate remedy at law.