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06.02.2010 Blog

EDVA Denies Injunction Going Forward Where Parties are Competitors: Humanscale v. CompX


CompX received a jury verdict of infringement on two of its patents, with the jury awarding over $19 million in damages.  (See our previous posts about the case here.)  CompX subsequently asked the Court for a permanent injunction against Humanscale's future infringement.  The Court denied CompX's request in a memorandum order.


The Court analyzed the four eBay factors as follows.


(1) irreparable injury:  the Court concluded that "CompX has presented insufficient evidence that the direct competition between the parties and its practice of not licensing its patents result in irreparable harm to its sales and goodwill," relying on i4i v. Microsoft, 589 F.3d 831 (Fed. Cir. 2010).  "To accept the argument that any claim of direct competition should result in a finding of irreparable harm would essentially create a presumption in favor of irreparable harm, contrary to the Supreme Court’s directive in eBay."  Thus, despite the presence of competition, which the Court noted usually constitutes irreparable harm in a two-competitors market, and even if CompX had demonstrated loss of market share, the Court still found that CompX had not proven irreparable harm, in part because the patents expire in six weeks.


(2) inadequate remedies:  the Court relied on its analysis under the first factor, and concluded that CompX had not demonstrated that the 6% royalty awarded by the jury would be inadequate compensation.


The Court thus denied the injunction based on its analysis of the first two factors, and then noted that the balance of hardships (factor 3) favors Humanscale because of the short life left on the paetnts, and because the injunction would prevent Humanscale from selling its entire keyboard system even though only one component was found to infringe.  The court found the public interest (factor 4) to be neutral.


NB:  the Court also did not enter judgment on the jury's verdict of infringement and award of damages, but instead took that under advisement.  The Court also has not yet ruled on CompX's request for its attorney fees.