Court Opinion

ID: 6499579
Source: CourtListenerOpinion
Date Created: 2022-07-13 14:00:27.967628+00
Date Added: 2024-06-11T09:11:32.045392
License: Public Domain

Case: 21-2106   Document: 79     Page: 1   Filed: 07/13/2022

    United States Court of Appeals
       for the Federal Circuit
                 ______________________

            KONINKLIJKE PHILIPS N.V.,
           Plaintiff-Counter Defendant-Appellee

         PHILIPS RS NORTH AMERICA LLC,
              Counter Defendant-Appellee

                            v.

   THALES DIS AIS USA LLC, FKA GEMALTO IOT
    LLC, FKA CINTERION WIRELESS MODULES
                  NAFTA LLC,
            Defendant-Counter Claimant

 THALES USA, INC., THALES S.A., CALAMP CORP.,
     XIRGO TECHNOLOGIES, LLC, LAIRD
            CONNECTIVITY, INC.,
                   Defendants

   THALES DIS AIS DEUTSCHLAND GMBH, FKA
             GEMALTO M2M GMBH,
       Defendant-Counter Claimant-Appellant
              ______________________

                       2021-2106
                 ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:20-cv-01713-CFC, Chief
 Judge Colm F. Connolly.
                 ______________________
Case: 21-2106   Document: 79     Page: 2      Filed: 07/13/2022

 2               KONINKLIJKE PHILIPS N.V.   v. THALES USA, INC.

                 Decided: July 13, 2022
                 ______________________

     ELEY THOMPSON, Foley & Lardner LLP, Chicago, IL,
 argued for plaintiff-counter defendant-appellee and coun-
 ter defendant-appellee. Also represented by KEVIN M.
 LITTMAN, LUCAS I. SILVA, Boston, MA.

    PAUL ZEINEDDIN, Axinn Veltrop & Harkrider LLP,
 Washington, DC, argued for defendant-counterclaimant-
 appellant. Also represented by MICHAEL L. KEELEY;
 THOMAS K. HEDEMANN, Hartford, CT; ERIC ALAN KRAUSE,
 JEANNINE YOO SANO, San Francisco, CA.

    MARK D. SELWYN, Wilmer Cutler Pickering Hale and
 Dorr LLP, Palo Alto, CA, for amicus curiae ACT | The App
 Association. Also represented by MARK CHRISTOPHER
 FLEMING, TIMOTHY D. SYRETT, Boston, MA.

    JOHN ARPIO JURATA, JR., Orrick, Herrington & Sutcliffe
 LLP, Washington, DC, for amicus curiae American Honda
 Motor Co., Inc.

     DAVID W. LONG, Essential Patent LLC, Oak Hill, VA,
 for amici curiae Lars Gustav Brismark, Stefan H. Geyers-
 berger, Rudolf J. Peters, Raymond J. Warren, Heinrich
 Dirk Weiler.

     MATTHEW HOLDER, Sheppard Mullin Richter & Hamp-
 ton LLP, San Diego, CA, for amici curiae Continental Au-
 tomotive Systems, Inc., u-blox America, Inc.        Also
 represented by MARTIN BADER, STEPHEN S. KORNICZKY.

   ERIC F. CITRON, Goldstein & Russell, P.C., Bethesda,
 MD, for amicus curiae Qualcomm Incorporated.
                 ______________________
Case: 21-2106    Document: 79        Page: 3      Filed: 07/13/2022

 KONINKLIJKE PHILIPS N.V.   v. THALES USA, INC.                 3

    Before MOORE, Chief Judge, DYK and CHEN, Circuit
                        Judges.
 MOORE, Chief Judge.
     Thales DIS AIS Deutschland GMBH (Thales) appeals
 the United States District Court for the District of Dela-
 ware’s denial of its motion for a preliminary injunction en-
 joining Koninklijke Philips N.V. (Philips) from seeking an
 exclusion order from the International Trade Commission
 (ITC). We affirm.
                        BACKGROUND
     Philips and Thales design and manufacture telecom-
 munications equipment and related technologies, includ-
 ing those related to various generations of wireless
 networks. Philips and Thales have been engaged in nego-
 tiations over what Philips asserts are standard essential
 patents (SEPs) that Thales has implemented according to
 European Telecommunications Standards Institute (ETSI)
 specifications. After negotiations did not yield an agreed-
 upon fair, reasonable, and nondiscriminatory (FRAND) li-
 cense for the SEPs, Philips filed an infringement and de-
 claratory action against Thales in the District of Delaware
 and an ITC action seeking an exclusion order. Thales filed
 a breach of contract counterclaim and declaratory counter-
 claim for a FRAND rate determination, and it moved for a
 preliminary injunction barring Philips from pursuing its
 ITC action. The district court denied Thales’ motion. Tha-
 les appeals. We have jurisdiction under 28 U.S.C. § 1292
 (a)(1), (c)(1).
                        DISCUSSION
                                I
     We review the grant or denial of a preliminary injunc-
 tion under the law of the regional circuit, in this case the
 Third Circuit, except for “considerations specific to patent
 issues,” which we review under our own body of law.
Case: 21-2106      Document: 79      Page: 4     Filed: 07/13/2022

 4                 KONINKLIJKE PHILIPS N.V.    v. THALES USA, INC.

 Metalcraft of Mayville, Inc. v. The Toro Co., 848 F.3d 1358,
 1363 (Fed. Cir. 2017). We and the Third Circuit review the
 denial of a preliminary injunction for abuse of discretion.
 Id.; Miller v. Mitchell, 598 F.3d 139, 145 (3d Cir. 2010). “An
 abuse of discretion may be established by showing that the
 court made a clear error of judgment in weighing relevant
 factors or exercised its discretion based upon an error of
 law or clearly erroneous factual findings.” Novo Nordisk of
 N. Am., Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed.
 Cir. 1996).
     A decision to grant or deny a motion for a preliminary
 injunction is within the discretion of the district court. Id.
 To obtain a preliminary injunction, a party must establish
 “that [it] is likely to succeed on the merits, that [it] is likely
 to suffer irreparable harm in the absence of preliminary
 relief, that the balance of equities tips in [its] favor, and
 that an injunction is in the public interest.” Luminara
 Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1352
 (Fed. Cir. 2016) (quoting Winter v. Nat. Res. Def. Council,
 Inc., 555 U.S. 7, 20 (2008)).
                                II
     Thales argues that the district court erred in conclud-
 ing that Thales failed to show it is likely to suffer irrepara-
 ble harm from Philips’ ITC action. We disagree.
     A party seeking a preliminary injunction must estab-
 lish that it is likely to suffer irreparable harm without an
 injunction. Winter, 555 U.S. at 22. The mere possibility or
 speculation of harm is insufficient. Id. (rejecting the Ninth
 Circuit’s possibility standard as “too lenient”). Evidence of
 speculative harms, such as customers merely expressing
 concern that a potential future ITC exclusion order could
 affect Thales’ ability to deliver products down the road, is
 insufficient to show a likelihood of irreparable harm. See
 Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d
 205, 219 (Fed. Cir. 2014) (holding that declaration assert-
 ing that physicians “would be less likely” to prescribe
Case: 21-2106     Document: 79       Page: 5      Filed: 07/13/2022

 KONINKLIJKE PHILIPS N.V.   v. THALES USA, INC.                 5

 movant’s products was too speculative to establish irrepa-
 rable harm); Takeda Pharms. U.S.A., Inc. v. Mylan
 Pharms. Inc., 967 F.3d 1339, 1349 & n.8 (Fed. Cir. 2020)
 (affirming district court’s determination that appellant had
 not shown a likelihood of irreparable harm where plaintiff
 presented bare assertions that infringing product would re-
 sult in price erosion and loss of market share, as well as an
 email indicating that one customer had left).
      The district court did not clearly err in determining
 that Thales’ evidence of harm was conclusory and that it
 failed to meet its burden of establishing likely irreparable
 harm. Thales did not present any evidence that it lost cus-
 tomers, had customers delay purchases, or struggled to ac-
 quire new business because of the ongoing ITC
 proceedings. Oral Arg. at 3:24–3:52. 1 Instead, it presented
 affidavits stating only that the threat of an ITC exclusion
 order caused several customers to “voice concerns” and ex-
 press doubt regarding Thales’ ability to deliver products.
 J.A. 857–59, 861–66. And during oral argument, it charac-
 terized its alleged harm as living under the “cloud on the
 business” of a potential exclusion order and the potential
 loss of business that may occur if it loses at the ITC. Oral
 Arg. at 15:22–15:31. This type of speculative harm does
 not justify the rare and extraordinary relief of a prelimi-
 nary injunction. See Takeda Pharms, 967 F.3d at 1349 &
 n.8; cf. Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d
 922, 930 (Fed. Cir. 2012) (affirming district court’s deter-
 mination of irreparable harm where movant demonstrated
 change in pricing behavior and supported testimony with
 specific financial records). Based on the record, the district
 court did not clearly err in finding that there was no evi-
 dence of likely irreparable harm and thus did not abuse its

     1   Available at https://oralarguments.cafc.uscourts.
     gov/default.aspx?fl=21-2106_06072022.mp3.
Case: 21-2106    Document: 79       Page: 6     Filed: 07/13/2022

 6               KONINKLIJKE PHILIPS N.V.     v. THALES USA, INC.

 discretion in holding that Thales was not entitled to a pre-
 liminary injunction.
                        CONCLUSION
      For the reasons discussed above, we hold that the dis-
 trict court did not abuse its discretion in denying Thales’
 motion for a preliminary injunction.
                        AFFIRMED
                            Costs
 Thales shall bear costs.