First published in LES Insights

Abstract

An Arizona court recently denied a request for a preliminary injunction, finding that the accused infringer established a substantial question about the patent's enforceability because the patent owner filed a reissue patent application characterizing a recent U.S. Supreme Court decision, as "cast[ing] doubt" on the enforceability of its patent.

Patent owners who seek a preliminary injunction to temporarily stop infringing conduct before litigating on the merits must show that they are likely to succeed on the merits. Therefore, an infringer may prevent a preliminary injunction by showing a substantial question of invalidity, unenforceability, or noninfringement.

In a recent case, Neal Technologies, Inc. v. Innovative Performance Research, LLC,1 the U.S. District Court for the District of Arizona refused to grant a preliminary injunction because the patent owner's application to reissue the patent, acknowledged that its patent may not be enforceable, raising a substantial question of whether it would succeed on the merits.

Background

Neal Technologies is the exclusive licensee of a patent on a method of removing the original oil cooler from the engine block of certain Ford trucks and placing a new oil cooler at a different location within the engine block. Neal accused two oil-cooler-relocation kits sold by Innovative Performance Research of infringing its patent. After filing suit, Neal moved for a preliminary injunction to prevent Innovative Performance from making, using, offering to sell, and selling the accused kits in the United States.

Neal also applied for a patent reissue with the U.S. Patent and Trademark Office, explaining that a recent U.S. Supreme Court decision "cast doubt on the enforceability of a method patent when the steps could be performed by multiple actors." Thus, Neal proposed an amendment that combined steps in the patent so that one installer performed all method steps.

The Decision

The court found that it did not need to assess whether Neal satisfied any of the four factors because the reissue application established a substantial question about the enforceability of the patent. Neal argued that its reissue application did not call validity into question, as compared to a reexamination request, in which the petitioner must establish a substantial new question of patentability. The court acknowledged that the reissue proceedings did not address invalidity by obviousness or indefiniteness, but reasoned that the purpose of a reissue application is to correct an error in a patent that renders it "wholly or partially inoperative or invalid."

Similarly, the court rejected Neal's argument that unless and until the Patent Office grants Neal's reissue application, the existing patent remains valid and enforceable. But in the court's view, the issue of whether the original patent remains effective differs from whether a substantial question of enforceability exists.

Ultimately, the court declined to issue a preliminary injunction because the pending reissue application established a substantial question of enforceability by appearing to acknowledge the potential unenforceability of the patent in view of a recent Supreme Court decision.

Strategy and Conclusion

This decision illustrates how a reissue application and statements in that application may be viewed by a court to affect the likelihood of success on the merits and prevent a patent owner from obtaining a preliminary injunction.