Wednesday, July 13, 2022

Federal Circuit throws out Thales appeal: no irreparable harm shown, no position on ITC import bans against willing licensees taken

Thanks to the Comparative Patent Remedies blog I've just become aware of today's Federal Circuit opinion in a case in which Thales was appealing the denial of a preliminary injunction against Philips. In the court below (Delaware), Thales sought an antisuit injunction of the anti-enforcement type so that Philips would not have been able to enforce a potential U.S. import ban had the US International Trade Commission (USITC, or just ITC) granted one.

At the appellate hearing, the question of whether it is appropriate to seek an enforce an import ban against a willing licensee of standard-essential patents was on the agenda. Today's decision doesn't touch on it: the short Federal Circuit decision holds that Thales had "failed to show it is likely to suffer irreparable harm from Philips' ITC action." Here, however, the appeals court believes that "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 customers, had customers delay purchases, or struggled to acquire new business because of the ongoing ITC proceedings." Therefore, it all just amounted to speculative harm (such as "affidavits stating only that the threat of an ITC exclusion order caused several customers to “voice concerns” and express doubt regarding Thales’ ability to deliver products."), which falls far short of what it takes to "justify the rare and extraordinary relief of a preliminary injunction."

It may or may not be a coincidence that the Federal Circuit came down shortly after a final ITC decision that in my opinion practically mooted the appeal: no violation was found (which was also the view of the Administrative Law Judge presiding over the investigation). Philips can appeal that decision, but it would take quite some time before an import ban would loom large.

The question of whether a patentee can pursue an import ban despite the alleged infringer being, or claiming to be, a willing licensee--which is also at issue in Ericsson v. Apple--has been left for another day.