Archive for May, 2017

Federal Circuit’s Four Factor Fiddle Raises the Bar for Patent Injunctions

May 17th, 2017

LED colossus Nichia (the world’s largest supplier of LEDs) accused Everlight of infringing three patents relating to tiny LEDs used in LCD backlights, video displays, automobiles, an general lighting:

U.S. Patent No. 8,530,250, entitled “Light emitting device, resin package, resin-molded body, and methods for manufacturing light emitting device, resin package and resin-molded body”;

U.S. Patent No. 7,432,589, entitled “Semiconductor device”; and

U.S. Patent No. 7,462,870, entitled “Molded package and semiconductor device using molded package”

The district court found the patents to be valid and that Everlight infringed all three patents.  However, the court denied Nichia’s request for a permanent injunction.  Everlight appealed on infringement and validity, while Nichia appealed the injunction decision.

On appeal, the important part of the Federal Circuit opinion relates to the law on injunctions in patent cases.

Current law on permanent injunctions for patent infringement comes from the Supreme Court’s eBay v. Mercexchange decision, which established the following four-factor test for determining whether to grant a permanent injunction:

(1) the patentee suffered an irreparable injury;

(2) remedies available at law, such as monetary damages, are inadequate to compensate for the injury;

(3) considering the balance of hardships between plaintiff and defendant, an equitable remedy is warranted; and

(4) the public interest would not be disserved by a permanent injunction.

Since the eBay decision, courts have typically granted a permanent injunction upon a determination that a balancing of all four factors weighed in favor of injunctive relief and the patentee proved either irreparable injury (factor 1) or no adequate remedy at law (factor 2).

Here, however, the Federal Circuit held that proof of irreparable injury is required for a permanent injunction, regardless of whether the patentee has an adequate legal remedy, elevating factor 1 above all the others.

The court of appeal did not find “clear error in the district court’s finding that Nichia failed to prove that it would suffer irreparable harm absent the injunction.”

“Because Nichia failed to establish one of the four equitable factors,” the Federal Circuit continued, “the [district] court did not abuse its discretion in denying Nichia’s request for an injunction.”

And with that conclusion, the Federal Circuit ended its analysis, declining to review the district court’s findings on monetary damages (factor 2):

Because we affirm the court’s conclusion on irreparable harm, we do not reach the adequacy of monetary damages.

This may represent a significant change in the law, where instead of considering and balancing all four factors, the courts require the patentee to satisfy all four elements to obtain injunctive relief.

Such a shift would make it more difficult for a patentee to get an injunction after proving infringement.

Brookings Institution Report Highlights Green Patent Problems

May 10th, 2017

A new report by the Brookings Institution notes a troubling recent reversal in U.S. green patenting activity.

Specifically, the report found that the total number of clean tech patents granted by the U.S. Patent and Trademark Office between 2014 and 2016 declined by nine percent each year.  This after a long stretch of growth –  thirteen years of patent grants growing at a rate of seven percent annually between 2001 and 2014.

Here’s a graph from the report, based on data from the Cleantech PatentEdge database, run by our friends at IP Checkups:

Entitled “Patenting invention” Clean energy innovation trends and priorities for the Trump administration and Congress,” the report examined patterns in clean tech patenting since 2001, both nationally and by metropolitan area.

According to a Brookings Metro press release, the authors, Devashree Saha and Mark Muro, hope the report’s “baseline look at the pace and geography of cleantech innovation” will inform federal and local decision-making with respect to innovation policy.

The authors highlighted five key findings.  First, while green patenting has grown significantly since 2001, it may be slowing now.  This trend could be a result of funding declines by the federal government and venture capitalists over the past several years.

Second, green patenting is concentrated in a small group of technologies.  In particular, the report identifies advanced green materials, energy efficiency, and transportation (each accounting for 18% of the total) as having higher proportions of patents.

As for geography, the report concludes that green patenting is widely distributed across the United States, but large metropolitan areas are the source of a disproportionate share of the patenting activity.  Large and small metro areas show distinctive profiles in green patenting, varying in their specializations, the report found.

Finally, the report found that the share of clean tech patents owned by companies based outside the United States has grown over the years.  According to the Executive Summary, this trend reflects the globalization of clean tech industries, particular in Asian economies.

What does this mean for clean tech innovation and green patenting going forward?  Saha was quoted by Greentech Media, saying the data “raises concerns about the long-term competitiveness of the U.S. cleantech sector.”

Saha also said that the Trump administration’s plans to cut budgets for clean energy “could make this flattening a more permanent downward trend in the next few years.”

Muro commented on Trump’s budget proposal that would eliminate certain programs such as ARPA-E, the U.S. government’s energy innovation program, noting that “[t]here are critical [federal] programs that have major impacts on these industries and ecosystems.”

The report warns against the U.S. falling behind in clean tech innovation:

Given the size of the global clean energy economic opportunity, the United States can ill afford to relinquish its lead on innovation in the burgeoning global cleantech market to China or other countries.

The authors recommend that the U.S. maintain clean energy R&D appropriations at viable levels, maximize the impact of the national energy labs, preserve ARPA-E, and maintain and scale up U.S. energy innovation hubs.