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IP Litigation

Market realities must be considered when assessing irreparable harm for a preliminary injunction

April 24, 2014

IP Litigation

Market realities must be considered when assessing irreparable harm for a preliminary injunction

April 24, 2014

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Fed. Cir. vacates district court’s denial of plaintiff’s motion for preliminary injunction because the district court abused its discretion in determining that the plaintiff failed to prove a likelihood of success on the merits.  The patent relates to sod harvesters.

Trebo Mfg., Inc. v. Firefly Equip., LLC, __ F.3d __ (Fed. Cir. April 9, 2014) (RADER, Lourie, Prost) (D. Mont.: Cebull) (3 of 5 stars)

Infringement:  The district court erred by basing its analysis on an incorrect claim construction that was inconsistent with the plain claim language, improperly imported limitations from a preferred embodiment, and violated claim differentiation.  Relying on a screenshot from a video of the accused product in action, the Fed Cir concluded that the district court clearly erred in finding that the accused product could not move according to another claim limitation.

Validity:  The district court’s finding that there is a substantial question as to validity was clearly erroneous because the analysis failed to consider every limitation of the claims and relied on references that do not qualify as prior art.

Irreparable harm:  The Fed Cir held that “district court clearly erred in finding as speculative the harm Trebro is likely to suffer if its direct competitor is able to sell an infringing product in the small, niche sod harvester market.”  Slip op. at 16.  The evidence of one lost sale, “[g]iven the realities of [the sod harvester] business” and the fact that a single lost sale was a sizeable percentage of the market in this area, is sufficient to show a non-speculative harm.  Id.  The district court further erred by failing to consider “evidence showing likely loss of market share and loss of access to customers,” and by finding monetary damages adequate where patentee is able to quantify its loss.  Id. at 17.  Finally, that patentee “does not presently practice the patent does not detract from its likely irreparable harm,” where the parties “are direct competitors selling competing products in this market.”  Id. at 18.

Additional rulings:  Although the district court did not reach the last two prong of the preliminary injunction test, the Fed Cir offered its view on balance of equities and public interest.

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