Luminara Worldwide, LLC v. Liown Electronics Co. Ltd.

Addressing whether the district court erroneously granted a preliminary injunction, the US Court of Appeals for the Federal Circuit reversed the district court, finding that the injunction rested on an incorrect claim construction and that under the proper construction, a substantial question of validity precludes granting a preliminary injunction. Luminara Worldwide, LLC v. Liown Electronics Co. Ltd., No. 2015-1671 (Fed. Cir., Feb. 29, 2016) (Moore, J).

Luminara’s predecessor, Candella, acquired substantial rights from Disney Enterprises with respect to several patents covering flameless candle technology. Candella then sued Liown for patent infringement, resulting in a settlement. After Liown obtained its own patent on artificial flame technology, Liown told Candella that it would no longer comply with the settlement agreement, and began selling flameless candles to Candella’s exclusive customers.

Luminara sued Liown for infringement and moved for a preliminary injunction. Liown argued that a preliminary injunction was improper because the claims were invalid as anticipated by the prior art. After construing the claims, the district court rejected Liown’s argument, finding that the prior art did not teach the claim term “the body is free to pivot when supported by the flame support element.” Under the district court’s construction of “free to pivot,” this term required chaotic movement that is more than rotation around two axes, while the prior art taught a body that only rotated around two axes. Liown appealed.

On appeal, the Federal Circuit vacated the preliminary injunction as based on an incorrect claim construction. Reviewing the underlying claim construction de novo, the Court found that the proper construction requires chaotic movement but not movement that is more than rotation around two axes. The Court also found that, under the proper claim construction, the prior art likely taught all of the claimed limitations. Concluding that a substantial question of validity remained, the Court vacated the district court’s grant of the preliminary injunction.