Page 122 - Intellectual Property Disputes

Similarly, in Amado, the appellate court determined that the district court did not abuse its discretion in
dissolving an injunction "when, after applying the traditional four-factor test, it determined that an
injunction was no longer equitable under the circumstances." fn 46 The District Court for the Central
District of California noted, "Amado’s patent only covers a very small component of the infringing
products—claim 21, the only claim that the jury found Microsoft Office and Access infringed, covers a
single feature linking Access and Excel." fn 47

The Federal Circuit refused to substitute its judgment for that of the district court with regard to the
dissolution of the injunction, stating "[d]ue to the equitable nature of injunctive relief, district courts
have wide discretion to determine under what circumstances the grant of injunctive relief is appropriate,
... and under what circumstances the modification or dissolution of that injunction is warranted." fn 48
However, the Federal Circuit vacated the district court’s royalty award, finding that the district court
failed to adequately explain the basis for its award of $0.12 per infringing unit sold during the stay of the
permanent injunction. In addition, it was unclear whether a royalty rate had been set for future infringing
sales. The Federal Circuit held that a fundamental difference exists between a reasonable royalty for pre-
verdict infringement and damages for post-verdict infringement. It cited Paice for the proposition that
"‘[p]re-suit and post-judgment acts of infringement are distinct, and may warrant different royalty rates
given the change in the parties’ legal relationship and other factors.’" fn 49 The court explained that "the
assessment of damages for infringements taking place after the injunction should take into account the
change in the parties’ bargaining positions, and the resulting change in economic circumstances,
resulting from the determination of liability..." As a result, the court stated, "[b]ecause we are unable to
determine whether the district court’s award of $ 0.12 was a reasonable exercise of its discretion ... we
vacate the district court’s escrow award and remand the matter to the district court for reconsideration."
fn 50 The district court was directed to provide an adequate explanation for its royalty rate.

The Federal Circuit clarified Amado from Paice in confirming that the royalty rate for the post-verdict
infringement could differ from the pre-verdict infringement rate. The court explained, "[t]his is not a
case like Paice, however, where the court’s task was to assess an appropriate level of damages for
ongoing infringement under circumstances in which an injunction was not warranted. Here, Microsoft
was enjoined from further infringing activity yet was permitted to continue only by virtue, and with the
imprimatur, of the court-ordered stay." fn 51

In i4i Limited Partnership, fn 52 the Federal Circuit found that the imposed injunction was appropriate
and affirmed it based on application of the eBay framework. In granting a permanent injunction to i4i,
the court noted that "[t]he district court's conclusion properly recognized that the touchstone of the

fn 46 Amado v. Microsoft Corp., 517 F.3d 1353 (Fed. Cir. 2008).

fn 47 Amado v. Microsoft Corp., 2007 U.S. Dist. LEXIS 96487, 39 (C.D. Cal. 2007).

fn 48 Amado, 517 F.3d 1353 (Fed. Cir. 2008) (citing eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 126 S. Ct. 1837, 164 L. Ed. 2d
641 (2006) and Sys. Fed'n No. 91 v. Wright, 364 U.S. 642, 647–48, 81 S. Ct. 368, 5 L. Ed. 2d 349 (1961)).

fn 49 Id. (citing Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1317 (Fed. Cir. 2007)).

fn 50 Amado, 517 F.3d 1353 (Fed. Cir. 2008).

fn 51 Id.

fn 52 i4i L.P., 598 F.3d 831 (Fed. Cir. 2010).

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