U.S. District Judge Rodney Gilstrap has determined Collision Communications, a patent holder that secured a $445.5 million infringement verdict against Samsung Electronics last year, failed to show it was also entitled to a permanent injunction to prohibit ongoing infringement.
On Monday, Judge Gilstrap issued an 18-page opinion and order explaining where Collision fell short in its quest to prove a permanent injunction was the appropriate remedy in the case. The parties argued the issue before Judge Gilstrap May 11 during a roughly two-hour hearing.
To obtain permanent injunctive relief in a patent case, a party must meet each prong of a four-factor test, outlined in the U.S. Supreme Court’s 2006 holding in eBay v. MercExchange. Those four factors are: a showing that the party has suffered irreparable harm; that monetary damages are inadequate to compensate for the injury; that the “balance of hardships” between the plaintiff and defendant show that the injunction is warranted; and that the public interest is not disserved by the injunction.
Austin Curry of Caldwell Cassady & Curry, who represents Collision, said during the hearing earlier this month that “eBay did not change how principles of equity work in patent cases,” while discussing the basis of those principles rooted in the 18th century English High Court of Chancery.
In his opinion and order, Judge Gilstrap wrote, “[w]hile nothing in eBay closed the door on permanent injunctions as an avenue for relief in patent cases, in the 20 years since eBay monetary damages have become the presumptive remedy in practice.”
Working his way through the four-factor test, Judge Gilstrap found Collision had shown it suffered irreparable harm in this case and that monetary damages are inadequate to compensate for the injury.
But when it came to analyzing the balance of hardships, Judge Gilstrap wrote Collision “has not met its burden of establishing that the balance of hardships favors injunctive relief, in light of its failure to identify any particular hardship it would face if the injunction were to be denied, and its bare assertions that Samsung would have no issue complying with the proposed ‘tailored’ injunction.”
“The Court finds that both sides have made a rather poor showing on this issue. … The hardships each would bear must be identified clearly and then compared fairly,” Judge Gilstrap wrote.
Collision fell short on the public interest prong, too, Judge Gilstrap held.
“Similar to its analysis on the balance of the hardships factor, the Court finds that Collision cannot point to a general idea that the enforcement of patent rights is usually in the public interest to meet its burden on this factor,” Judge Gilstrap wrote. “Collision has made no showing that in this case, on these particular facts, the importance of upholding the patent system and encouraging future parties to negotiate with patent holders rather than to strategically infringe meets its burden to show that the public interest will not be disserved by an injunction.”
In October, jurors determined Samsung had willfully infringed four Collision Communications’ patents covering technology that reduces signal interference in cellular network communications.
The idea was conceived in the early 2000s by inventors and engineers at defense contractor BAE Systems, which intended to sell the tool to the military.
When the military decided not to implement the technology, and recognizing that its ability to prevent signal interference and make phones on busy networks more reliable had commercial value, BAE partnered with Collision to try and take the product to the civilian market.
Collision, which also hired inventors and engineers from BAE, acquired the patents in 2010 and 2011 and approached major companies such as Nokia, Ericsson and Samsung.
Extensive discussions, which included running several simulations using the technology, took place between Samsung and Collision from 2011 through 2014, but then talks went cold.
During trial, jurors were shown Samsung’s internal email communications where they discussed their desire to use the technology and not pay for it.
Samsung had argued it hadn’t infringed the technology and that the patents were invalid. The company also argued that if the jury did find infringement, damages should be $10 million or less. The jury rejected those arguments, awarding damages to Collision in the form of a running royalty.
Judge GIlstrap entered final judgment Nov. 12. About a month later, on Dec. 10, Collision filed its motion for a permanent injunction against Samsung, the same day Samsung asked the court for a new trial.
Samsung filed a sealed response to the motion for an injunction Jan. 7.
Samsung’s attorney, John Bash of Quinn Emanuel, argued at the hearing that the injunction Collision was seeking would prevent his client from importing “well above 75 percent of products” the electronics giant produces, including all phones and tablets.
Andrew DeLaney of the Department of Justice’s antitrust division in Washington, D.C., and Nicholas Matich IV of the U.S. Patent and Trademark Office’s Office of General Counsel also spoke during the hearing Monday. Without expressly supporting either party’s views, both told Judge Gilstrap case law supports the idea that permanent injunctions are an available remedy to stop patent infringement in certain circumstances.
The government filed a statement of interest in this case Feb. 27.
“The incentive to innovate at the heart of the Patent Act is undermined when the availability of injunctions to block infringement is unduly limited,” the government’s brief reads.
Collision is also represented by Brad Caldwell, Chris Stewart, Justin Nemunaitis, Aisha Mahmood Haley, John Summers, Seth Reich, James Smith, James Yang, Alexander Gras and Xu Zhou of Caldwell Cassady & Curry and Andrea Fair of Miller Fair Henry.
Samsung is also represented by Sean S. Pak, Victoria Maroulis, Patrick Stafford, Olga Slobodyanyuk, Nagendra Setty, Kevin Hardy, Joseph Reed, John McKee, Brice Lynch, Brian E. Mack, Brady Huynh and Austin Buscher of Quinn Emanuel and Melissa Smith of Gillam & Smith.
The case number is 2:23-cv-00587.