2 Criterion J. on Innovation 1 (2017)

handle is hein.journals/critjinov2 and id is 1 raw text is: 






                                  T HE


C R I T E R 1 0 N
JOURNAL                        ON          INNOVATIO                         N


VOL. 2                        +       +        +                        2017



           Irreparable Harm from Patent Infringement

                             j Gregory Sidak*


The Patent Act empowers a court to issue an injunction to prevent the
violation of any right secured by patent.' Whether a court will permanently
enjoin an infringer depends on whether (i) the patent holder would suffer
irreparable harm otherwise, (2) its legal remedies are inadequate, (3) the
balance of hardships favors the patent holder, and (4) the injunction would
not disserve the public interest.2 Similar factors inform the grant of a prelim-
inary injunction.3 The Federal Circuit often says that the harm from patent
infringement is irreparable if it cannot be measured.4 I say that such harm is
irreparable because it irreversibly destroys wealth.

                  I. IMMEASURABLE OR IRREPARABLE HARM?

The Federal Circuit has found harm irreparable due to its immeasurability
when patent infringement causes the patent holder to suffer price erosion
or to lose market share, customers, goodwill, or brand value: However,

  * Chairman, Criterion Economics, Washington, D.C. Email: jgsidak@criterioneconomics.com. I thank
Liz Lagerfeld, Paul Michel, Urska Petrovcic, Marc Richardson, Shinji Ryu, Jeremy Skog, Blount Stewart,
John Thorne, and Andrew Vassallo for helpful comments. The views expressed here are solely my own.
Copyright 2017 byJ. Gregory Sidak. All rights reserved.
  1 35 U.S.C.  283.
  2 eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (20o6). A court balances the factors. See, e.g.,
Bayer Pharma AG v. Watson Labs., Inc., No. 12-1726-LPS, 2oi6 WL 7468172, at *3 (D. Del. Dec. 28, 2016).
  3 Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1344 (Fed. Cir. 2008).
  4 See, e.g., Douglas Dynamics, LLC v. Buyers Prods., Co., 717 F.3d 1336, 1344 (Fed. Cir. 2013); Apple Inc.
v. Samsung Elecs. Co. (Apple III), 809 F.3d 633, 650 (Fed. Cir. 2015) (Reyna, C.J., concurring).
  5 Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012); i4i Ltd. v. Microsoft Corp.,
598 F.3d 831, 862 (Fed. Cir. 201o); Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1558 (Fed. Cir. 1994).
Related harms found to be irreparable include forgone benefits from network effects or demand comple-
mentarity Apple III, 809 F.3d at 645; Apple, Inc. v. Samsung Elecs. Co. (Apple 1), 678 F.3d 1314, 1337 (Fed.
Cir. 2012). Apart from creating this line of cases emphasizing immeasurability, the Federal Circuit has
found harm irreparable if the infringer cannot pay damages. Apple Inc. v. Samsung Elecs. Co. (Apple II),
735 F.3d 1352, 1369 (Fed. Cir. 2013); see also J. Gregory Sidak, Is Harm Ever Irreparable, 2 CRITERIONJ. ON
INNOVATION 7, 13 (2017).

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