A finding of no competition for the purpose of irreparable harm conflicts with a clear finding of competition for the purpose of awarding damages.

Presidio Components, Inc. (“Presidio”) owns U.S. Patent No. 6,816,356  (“the ‘356 patent”), which relates to integrated broadband ceramic capacitor arrays. Presidio asserted that American Technical Ceramics Corp.’s (“ATC”) 545L capacitors infringed the ‘356 patent. The jury found that the asserted claims were willfully infringed, were not invalid, and awarded Presidio lost profits. It also found that Presidio’s marking of its capacitors was not done for the purposes of deceiving the public. The district court denied ATC’s post-trial motions for judgment as a matter of law (“JMOL”) and in the alternative for a new trial on validity and infringement of the ‘356 patent. ATC appealed these decisions.  Presidio cross-appealed the court’s denial of a permanent injunction, JMOL on willfulness, and ongoing royalty rate and false marketing determinations.

The Federal Circuit affirmed-in-part, vacated-in-part, and remanded. First, the Federal Circuit affirmed the district court’s finding that substantial evidence supported the jury’s verdict that ATC’s capacitors infringed the asserted claims of the ‘356 patent. 

The Federal Circuit then affirmed the denial of the JMOL on lost profit damages. The jury had awarded lost profits damages to Presidio. Presidio had advanced its lost profits theory under the four-factor Panduit test, which required Presidio to show: (1) demand for the patented product; (2) absence of acceptable non-infringing substitutes; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit that would have been made.  See Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978). On appeal, ATC contended that Presidio had failed to establish the first two factors. But the Federal Circuit found that substantial evidence supported the jury’s verdict that (1) demand existed for Presidio’s BB capacitors, which directly competed with the infringing 545L capacitors and; (2) the proposed non-infringing substitutes were not adequate substitutes in the same market. 

The Federal Circuit then vacated the district court’s denial of a permanent injunction. The Federal Circuit explained that the district court’s finding of no competition for the purpose of irreparable harm conflicted with the clear finding of competition for the purpose of awarding damages. Indeed, the record showed direct and substantial competition between the parties. In light of the record, the district court placed too much weight on Presidio’s failure to practice the ‘356 patent, because, even without practicing the claimed invention, a patentee can suffer irreparable injury. As the district court clearly erred in finding no irreparable injury, the Federal Court concluded that the district court abused its discretion when it denied Presidio a permanent injunction. Accordingly, the Federal Circuit vacated the district court’s decision and remanded. The court also vacated the related ongoing royalty determination.

Finally, the Federal Circuit evaluated ATC’s false marketing counterclaim. The Federal Circuit determined that the amendments to the false marketing statute (35 U.S.C. § 292) applied retroactively, and thus covered this appeal. Under those amendments, ATC’s appeal of its qui tam false marketing counterclaim was moot, as those amendments make clear that only the United States can bring a false marketing claim.

A copy of the opinion can be found here