Page 121 - Intellectual Property Disputes

growing importance in a time of rising energy prices, Novozymes has a competing product, and
Genencor has products that do not infringe the ’031 patent." fn 42

In contrast, several courts have refused to issue permanent injunctions when the parties did not compete
and when the plaintiff had a history of licensing the patent. For example, in z4 Technologies, Inc. v.
Microsoft Corp., the district court denied a permanent injunction in part because "[t]here is no logical
reason that a potential consumer or licensee of z4’s technology would have been dissuaded from
purchasing or licensing z4’s product activation technology for use in its own software due to Microsoft’s
infringement." fn 43 The court explained that "Microsoft only uses the infringing technology as a small
component of its own software, and it is not likely that any consumer of Microsoft’s Windows or Office
software purchases these products for their product activation functionality." Further, it stated that

[h]ere, product activation is a very small component of the Microsoft Windows and Office
software products that the jury found to infringe z4’s patents. The infringing product activation
component of the software is in no way related to the core functionality for which the software is
purchased by consumers. Accordingly, Justice Kennedy’s comments support the conclusion that
monetary damages would be sufficient to compensate z4 for any future infringement by
Microsoft.

Consequently, the court found no irreparable harm and that z4 could be compensated for any harm by
"calculating a reasonable royalty for Microsoft’s continued use of the product activation technology." fn
44

The U.S. District Court for the Eastern District of Texas explained that "[i]n the absence of a permanent
injunction against Microsoft, z4 will not suffer lost profits, the loss of brand name recognition or the loss
of market share because of Microsoft’s continued sale of the infringing products. These are the type of
injuries that are often incalculable and irreparable." The court noted that "z4 is not excluded from the
use of its intellectual property in a way that cannot be calculated with reasonable certainty in the form of
monetary damages, just as the past damages for infringement were calculated at trial." In addressing the
balance of hardships, the court stated, "[i]mportantly, the potential hardships Microsoft could suffer if
the injunction were granted outweigh any limited and reparable hardships that z4 would suffer in the
absence of an injunction." The court also found that the weight of public interest mitigates in favor of
Microsoft, stating that

[u]nder both aspects of z4’s proposed permanent injunction, there is a risk that certain sectors of
the public might suffer some negative effects. However, the Court is unaware of any negative
effects that might befall the public in the absence of an injunction. Although these negative
effects are somewhat speculative, such potential negative effects on the public weigh, even if
only slightly, against granting an injunction. Accordingly, the public interest is likely to be
disserved if a permanent injunction were entered against Microsoft. fn 45

fn 42 Id.

fn 43 z4 Techs., Inc. v. Microsoft Corp., 434 F. Supp. 2d 437 (E.D. Texas 2006).

fn 44 Id.

fn 45 Id.

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