In an unusual move, the US Court of Appeals for the Federal Circuit updated its original decision in Asetek, holding that the injunction no longer applied to the non-party in the case, except for aiding and abetting new violations by CMI. Asetek Danmark A/S v. CMI USA Inc., FKA Cooler Master USA Inc., Case Nos. 16-1026; -1183 (Fed. Cir., Apr. 3, 2017) (Taranto, J).
In its prior opinion, the Federal Circuit remanded but did not vacate an injunction against Cooler Master Co. Ltd., a Taiwanese supplier of computer components that was not part of the trial against its US distributor, CMI USA (IP Update, Vol. 20, No. 1). The Court kept the injunction in place against Cooler Master and CMI until modified by the lower court.
Chief Judge Prost dissented in that opinion, contending that the correct course of action would be to vacate the portions of the injunction that improperly reached Cooler Master. Judge Prost pointed out that the court had no basis to justify the injunction against Cooler Master in its own capacity. The only exception to that is under Rule 65(d) where Cooler Master assists CMI in acts of infringement.
Following the original opinion, CMI filed for a rehearing, which was partially granted. CMI argued that the Federal Circuit’s original opinion established a new rule that a pre-liability permanent injunction against a non-party is permissible pending a determination of liability. CMI asserted that this new rule violated two well-established canons: that everyone has a right to their day in court, and that actual success on the merits must precede a permanent injunction. CMI also argued that the Court’s remand of further proceedings to determine the relationship between CMI and Cooler Master before a final conclusion could be made about the scope of the injunction is an impermissible advisory opinion. In its revised opinion, the Federal Circuit agreed.
The original panel has now issued a new opinion that adopts Chief Judge Prost’s position and therefore deletes her partial dissent and the panel’s non-vacatur. The Court held that until further proceedings determine the proper reach of the injunction, it is vacated insofar as the injunction reaches conduct by Cooler Master that does not abet new violations by CMI.