Brocade Comms. Sys., Inc. et al. v. A10 Networks, Inc., et al., No. 5:10-cv-03428 (N.D. Cal., Jan. 10, 2013).

http://docs.justia.com/cases/federal/district-courts/california/candce/5:2010cv03428/230713/830/0.pdf?1357902509

Brocade sued against rival A10 Networks for infringing certain claims in Brocade’s three global server load balancing (“GSLB”) and high availability (“HA”) patents. Following a jury verdict that found infringement by A10 of several Brocade patent claims, Brocade moved to permanently enjoin A10 from making and selling its infringing AX series product. The court applied the four-factor test set out in eBay in determining whether a permanent injunction should issue: (1) irreparable harm; (2) inadequate legal remedies; (3) balance of hardships; and (4) the public interest.

The court began its analysis by noting the “curious absence of references” in the Federal Circuit’s most recent permanent injunction decisions to the standard of “causal nexus” between the established infringement and irreparable harm from the loss of the patentee’s exclusive right to practice its patents. Without deciding the broader question of whether parties requesting permanent injunctive relief should always be required to prove a “sufficiently strong causal nexus”, the court simply pointed to evidence that Brocade practiced the infringed claims, that Brocade had not licensed any of the patents at issue, and that A10 was a direct competitor, making Brocade’s loss of exclusivity “particularly injurious.” On these factual findings, the Court concluded that Brocade had established irreparable harm.

This same evidence led the court to conclude that money damages would be inadequate to remedy the harm to Brocade from A10’s infringement. As the court stated, “[a]lthough money damages may compensate Brocade for previous harm from the infringement, they don’t protect Brocade’s right to practice exclusively its patented improvements to the GSLB and HA functions.”

In resolving the third and fourth eBay factors in Brocade’s favor, the court continued to emphasize the importance of protecting Brocade’s exclusive patent rights. Weighing the balance of hardships, the court stated that Brocade “would suffer ongoing loss of its rights to exclusively practice its patents…at the hands of a direct competitor” in the absence of an injunction, while A10’s hardship would be minimal in the face of an injunction, as its own witnesses testified that what drove consumer demand for the AX product were features other than the infringing features, that the infringing features were not the core components of the AX product, and that A10 could easily design around Brocade’s patented claims.

In granting Brocade’s motion for a permanent injunction, the court attempted to fashion an injunction that fairly recognized the fact that the AX product series infringed only four claims in the three patents in suit, and that the series AX series is composed of many features, only a few of which had been found to infringe. The limited injunction fashioned by the court applied only to future sales of AX series products and only to those products containing infringing elements. As the court stated, “A10 may continue to sell the AX series without the infringing software, and the public may continue to enjoy the non-infringing features of the product. If A10 cannot design around the infringing features and loses market share as a result, the patented software and hardware are more essential to the product than A10 predicts, and A10 has no entitlement to continue infringement of Brocade’s patents only to ensure that A10 remains competitive. Regardless of the outcome, Brocade’s exclusive rights to claims in its patents that it proved A10 infringed are protected.”