Pending Reexamination has Major Effect on Injunction Decision

Scott Daniels | August 9, 2011

Judge Colleen McMahon included some interesting comments on reexamination in her decision last week, ordering a permanent injunction against future infringement in Inventio v. Otis Elevator, 01-cv-5377 (S.D.N.Y.).  Inventio, a subsidiary of Schindler, sued Otis in 2006 for infringement of U.S. Patent No. 5,689,094.  At the conclusion of a trial last month, the jury found the ‘094 patent to be valid and infringed, and Inventio requested a permanent injunction. 

Judge McMahon applied the four-factor test required by eBay, finding that the first three factors – irreparable injury to the patentee in the absence of an injunction, adequacy of money damages, balance of hardship between the parties – weighed heavily in favor of enjoining any future infringement.  The Judge, however, was troubled by the fourth factor, the public interest.  “Ordinarily, [the public interest] would weigh heavily in favor of the patentee,” but in this case, “[u]nbeknownst to the Court … by the time we went to trial, the PTO not only had ‘094 patent under reexamination … but … had issued an initial office action rejecting all the claims in suit.”  Apparently, no one had told the Judge about the co-pending reexamination filed last December or about the PTO’s non-final rejection issued in April. 

Judge McMahon was clearly annoyed, but also concerned about the effect an injunction might have on the public interest: “Putting to one side the waste of resources, judicial and otherwise, appurtenant to holding a trial under these circumstances, it is hard to see the public interest in enjoining the use of what may soon turn out to be – the verdict notwithstanding – an invalid patent.”  On the other hand, the Judge felt obliged to give effect to the jury’s verdict in favor of the Inventio patentee. 

Judge McMahon therefore granted the injunction, but in the limited form proposed by the accused infringer Otis.  The injunction takes effect immediately and will “remain in effect as long as all the Asserted Claims remain valid, unexpired, and in force.”  But if “all the Asserted Claims are either amended or rejected in a final office action by the Patent and Trademark Office in a reexamination or reissue, the parties shall return to the Court to discuss whether a modification or stay of the injunction is appropriate” (emphasis added).

The ‘094 patent reexamination is in its earlier stages and Inventio has ample opportunity to rebut the prior art challenge to its patent.  Still, the case demonstrates the public interest quandary faced by a judge who is asked to enjoin infringement of a patent that has been determined to be invalid by the same agency that originally granted it. 

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