Permanent Injunctions In Patent Cases: A Permanent Problem For Publicly Traded Companies?
By Catherine Fredenburgh ( May 31, 2006, 12:00 AM EDT) -- Management of a publicly traded company found liable for patent infringement likely will face a difficult choice. Where the infringed patent is not easily designed around, and an injunction against continued infringement would devastate the infringer's business, the federal courts' traditional equitable analysis of whether to grant an injunction includes a balance of the hardships: the hardship suffered by the patent owner from denial of the requested injunction balanced against the hardship suffered by the infringer from grant of the injunction. The hardship on the infringer from an injunction against continued infringement can be enormous, including disruption of the entire business, irreparable harm to customer and supplier relationships, and the loss of expensive plants, equipment, and valuable employees. Where the hardship that would be suffered by the infringer grossly exceeds that that would be suffered by the patent owner, courts traditionally have limited, and in some cases denied, permanent injunctions. But the infringer's choice of whether to argue the hardship that it would suffer from the injunction is not an easy one. Detailing in court papers the kind of hardship relevant to the equitable analysis may raise dangers, particularly for a publicly traded company. These dangers have reduced the ability of publicly traded companies to defend against permanent injunctions in patent cases. As a result, some have called for reform of the patent laws to create a special standard for injunctions in patent cases. These legislative proposals, however, carry problems of their own....
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