Opinion ID: 807002
Heading Depth: 2
Heading Rank: 1

Heading: Relief for Ongoing Infringement

Text: WhitServe first cross-appeals the trial court’s refusal to provide any relief for CPi’s ongoing infringement of its patents. Specifically, WhitServe argues it was an abuse of discretion for the trial court to deny its request for either a permanent injunction or an ongoing royalty and leave it uncompensated for future acts of infringement by CPi except via resort to serial litigation. CPi responds that the trial court properly refused to enjoin its infringement because WhitServe failed to establish it would suffer irreparable harm and that WhitServe was effectively granted prospective relief in the form of a paid-up license so no forward-looking relief was necessary. There are several types of relief for ongoing infringement that a court can consider: (1) it can grant an injunction; (2) it can order the parties to attempt to negotiate terms for future use of the invention; (3) it can grant an ongoing royalty; or (4) it can exercise its discretion to conclude that no forward-looking relief is appropriate in the circumstances. See Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1379 (Fed. Cir. 2010) (“If the district court determines that a permanent injunction is not warranted, the district court may, and is encouraged, WHITSERVE v. COMPUTER PACKAGES 40 to allow the parties to negotiate a license.”); Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1314-15 (Fed. Cir. 2007) (“[A]warding an ongoing royalty where ‘necessary’ to effectuate a remedy . . . does not justify the provision of such relief as a matter of course whenever a permanent injunction is not imposed.”). All of these decisions are reviewed for abuse of discretion. See, e.g., eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (“The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion.”); Telcordia, 612 F.3d at 1379 (“[T]he district court did not abuse its discretion by directing the parties to negotiate the terms of the appropriate royalty.”); Paice, 504 F.3d at 1315 (“[T]his court is unable to determine whether the district court abused its discretion in setting the ongoing royalty rate.”). Even under this highly deferential standard of review, we find the trial court’s treatment of the questions of prospective relief inadequate. Accordingly, we remand for further consideration of WhitServe’s alternative motions for a prospective remedy. Preliminarily, we can not accept CPi’s suggestion that a paid-up license was awarded. Although the jury heard evidence of two lump-sum licenses WhitServe had previously granted, the parties limited their damages arguments to past infringement rather than projected future infringement. The jury was instructed to award “damages,” which by definition covers only past harm. The jury’s verdict did not indicate that the award was meant to cover future use of WhitServe’s patents, and the trial court did not interpret the award as such. See Telcordia, 612 F.3d at 1377-78 (Fed. Cir. 2010) (explaining trial courts have discretion to interpret verdict forms). We, accordingly, decline to find that post-trial relief was properly denied because a paid-up license was awarded. 41 WHITSERVE v. COMPUTER PACKAGES Cf. Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1380-81 (Fed. Cir. 2008) (holding that injunctive relief was unwarranted when the jury’s award already included prospective relief). As for the injunction, while the trial court stated that WhitServe had failed to establish irreparable harm, it did not explain why it reached that conclusion. For instance, the trial court did not address WhitServe’s contention that it was a direct competitor in the market via its subsidiary, NetDocket, nor discuss whether monetary damages were alternatively available and adequate to address the forward-looking harm, if any, WhitServe might suffer. From such a record, it is impossible to conclude that the trial court properly exercised its discretion to assess whether injunctive relief is appropriate. While injunctive relief may very well not be appropriate on these facts, we simply can not tell on this record. 19 The record regarding the trial court’s refusal to award a compulsory license is even more sparse; the trial court never even addressed it. While this may be because WhitServe apparently first requested this relief in its reply in support of its motion for permanent injunction, the record, again, does not allow us to draw that conclusion. In Paice, we explained that a trial court’s failure to 19 We note, moreover, that the trial court did not address any of the other factors relevant to the equitable analysis it generally is to employ when assessing the propriety of injunction relief. See eBay, 547 U.S. 391 (explaining that “a plaintiff seeking a permanent injunction must satisfy a four-factor test”). For instance, as WhitServe argues, while there was considerable evidence that CPi had substantial non-infringing products in its portfolio, the trial court did not consider whether the possible absence of harm to CPi might weigh in favor of an injunction. WHITSERVE v. COMPUTER PACKAGES 42 explain the basis for its ongoing royalty rate precludes this court from reviewing the decision for an abuse of discretion, and thus, that remand was appropriate so the trial court could give some “indication as to why that rate is appropriate.” See 504 F.3d at 1315 (trial court’s failure to explain reasons for its decision regarding ongoing royalty prevents meaningful appellate review). While a trial court is not required to grant a compulsory license even when an injunction is denied, the court must adequately explain why it chooses to deny this alternative relief when it does so. We, therefore, vacate and remand this matter and direct the trial court to address the propriety of prospective relief and to explain any decision it makes with respect thereto. Of course, this decision must be made in light of both any new damages award and all relevant equitable considerations.