Post-eBay Demise of the Presumption of Irreparable Harm for Awarding Injunctive Relief

The U.S. Court of Appeals for the Federal Circuit has now clarified an issue that has festered for the past five years:  whether the presumption of irreparable harm for granting injunctive relief survived the Supreme Court’s ruling in eBay v. MercExchange. Settling this issue once and for all, the Federal Circuit has concluded that “eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.”  Robert Bosch LLC v. Pylon Mfg. Corp., Case No. 11-1096 (Fed. Cir., Oct. 13, 2011) (O’Malley, J.) (Bryson, J., dissenting).

The case was brought by Bosch the alleging infringement of four patents covering “beam-type wiper blades.” These “beam blades,” which provide better performance during inclement weather than their traditional bracketed brethren, were sold by both Bosch and Pylon. After a jury found infringement by Pylon, Bosch moved for entry of a permanent injunction. The district court denied this motion on the grounds that Bosch failed to demonstrate that it would suffer irreparable harm without a permanent injunction. Specifically, the district court based its determination on three factors:  the fact that Bosch had “fail[ed] to define a relevant market; the existence of additional competitors; and the non-core nature of Bosch’s wiper blade business in relation to its business as a whole.”  Bosch appealed.

Before specifically analyzing the district court’s decision to deny Bosch’s motion, the Federal Circuit addressed the uncertainty surrounding the effect of eBay on the presumption of irreparable harm presumption. Although the Supreme Court’s opinion in eBay had expressed that “broad classifications” and “categorical rule[s]” are inappropriate for deciding whether to grant injunctive relief, the Supreme Court did not explicitly address whether a presumption of irreparable harm should still follow from a finding of patent infringement. According to the Federal Circuit, eBay did in fact eliminate this presumption. However, the Federal Circuit went on to caution that eBay did not suggest that courts lean against findings of irreparable harm. Rather, the Federal Circuit cautioned that courts should be mindful of “the fundamental nature of patents as property rights granting the owner the right to exclude.”

Having resolved the ambiguity left in eBay’s wake, the Federal Circuit focused on the district court’s denial of Bosch’s motion for injunctive relief. According to the Federal Circuit, the district court’s reliance on the three factors mentioned above amounted to legal error. The Federal Circuit emphasized that “other infringers … in the marketplace does not negate irreparable harm.”  Moreover, “the fact that an infringer’s harm affects only a portion of a patentee’s business says nothing about whether that harm can be rectified.” In fact, the Federal Circuit found that Bosch would suffer irreparable harm despite these factors. It based this finding on evidence establishing “that the parties directly compete for customers in each of the relevant distribution channels;” that Bosch had “lost market share” due to Pylon’s infringement; and Pylon’s likely inability to satisfy a monetary judgment against it.