Page 120 - Intellectual Property Disputes

had offered a license to Toyota during the post-trial period." fn 36 The Court of Appeals noted "[u]nder
some circumstances, awarding an ongoing royalty for patent infringement in lieu of an injunction may
be appropriate." fn 37 "In most cases, where the district court determines that a permanent injunction is
not warranted, the district court may wish to allow the parties to negotiate a license amongst themselves
regarding future use of a patented invention before imposing an ongoing royalty. Should the parties fail
to come to an agreement, the district court could step in to assess a reasonable royalty in light of the
ongoing infringement." fn 38

Although Toyota was found to infringe, Paice could not demonstrate that it suffered irreparable harm
from the infringement. In fact, Paice did not manufacture or sell vehicles and commonly licensed its
patents. In denying the request for the injunction, the court ruled that a patent holder had no presumption
of irreparable harm even after the patent is found valid and infringed. The court concluded that because
the patents related to only a small portion of the vehicle, an injunction would be onerous on Toyota, and
that offering to license the technology to Toyota was an indication that monetary damages were
sufficient.

However, courts using this framework have issued permanent injunctions when direct competition
would cause irreparable harm. In Novozymes A/S v. Genencor International, Inc., a permanent injunction
was granted, and the court noted that the parties "were head-to-head competitors" and that Novozymes
A/S "ha[d] a right, granted by Congress, not to assist its rival with the use of proprietary technology." fn
39

The court, in applying the four-factor analysis, explained that the court in eBay "also rejected a
categorical rule that a patentee’s willingness to license its patent is enough to establish that the patentee
would not suffer irreparable harm in the absence of an injunction." fn 40 However, the U.S. District Court
for the District of Delaware further explains, "[l]egal remedies are not adequate to compensate
Novozymes for the infringement of its patent. Because Novozymes markets its technology by licensing
it to its subsidiary, the legal remedy of lost profits damages is not available. Even if it were, the statutory
right to exclude others represents a benefit that, under these circumstances, cannot be equated by an
award of cash." fn 41 In addition, the court noted, "Novozymes owns two related patents for alpha-
amylases. It licenses both patents to its subsidiary, not only in exchange for a 40% royalty, but also with
the expectation that the value of its subsidiary will increase with the successful marketing of the licensed
technology... even though Novozymes does not market the alpha-amylases itself, it has suffered harm
beyond the reasonable royalty that it can recover from Defendants." Concluding, the court stated, "there
is no evidence that a permanent injunction would harm the public. While the fuel ethanol industry has

fn 36 Paice LLC v. Toyota Motor Corp., 504 F.3d 1293 (Fed. Cir. 2007).

fn 37 Id. (citing Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 628 (Fed. Cir. 1985)).

fn 38 Id.

fn 39 Novozymes A/S v. Genencor Int’l, Inc., 474 F. Supp. 2d 592 (D. Del. 2007).

fn 40 Id. (citing eBay, 547 U.S. at 388).

fn 41 Novozymes, 474 F. Supp. 2d at 592.

116 © 2020, Association of International Certified Professional Accountants