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Federal Circuit: District Court Misfired When It Applied Second Circuit Law To Injunctive Relief Test In Patent Infringement Case

Posted in Patents

The recently decided Revision Military case is important when either moving for a preliminary injunction or defending against such a motion in a patent-infringement suit because it makes clear that Federal Circuit law governs the application of the four-factor injunctive relief test. When the United States Court of Appeals for the Federal Circuit rules on an appeal from a district court in a patent-infringement case, the Federal Circuit applies its precedent on substantive matters involving patent law but applies the law of the circuit where the district court is located for procedural matters not involving patent law. For example, in an appeal from a trial for patent infringement that occurred in the federal district court in Vermont, which is located in the Second Circuit Court of Appeals, the Federal Circuit would apply its precedent to substantive questions related to patent-law issues but would apply Second Circuit law on procedural or evidentiary questions not unique to patent law – e.g., was testimony properly excluded at trial because it constituted inadmissible hearsay. In a recent decision, the Federal Circuit held in Revision Military, Inc. v. Balboa Manufacturing Company, that when determining whether to grant a preliminary injunction, district courts must apply Federal Circuit law to determine whether the plaintiff satisfied the traditional four-factor test used to determine whether an injunction should issue.

Revision Military and Balboa Manufacturing both design, manufacture, and sell protective eyewear, such as glasses and goggles, for those using firearms. Revision brought suit against Balboa, alleging that the latter’s product infringed upon two of Revision’s design patents. Revision filed suit in the District of Vermont, which, again, is located in the Second Circuit. After filing suit, Revision moved for a preliminary injunction to enjoin Balboa from making and selling the allegedly infringing goggles.

In ruling on Revision’s motion, the district court employed the traditional four-factor test used to determine if Revision was entitled to an injunction: (1) was Revision likely to succeed on the merits of its infringement claims; (2) was Revision likely to suffer irreparable harm without the requested preliminary injunction; (3) did the balance of equities tip in Revision’s favor; and (4) was the issuance of the injunction in the public’s interest.  On target so far.

The problem in the case arose because although all circuit courts employ the same four-factor test, some circuits vary about what is needed to satisfy each factor. At issue in the case was Second Circuit precedent holding that when an injunction would alter rather than simply maintain the status quo, courts must apply a heightened standard requiring a plaintiff to show a “clear” or “substantial” likelihood of success on the merits. The Federal Circuit does not have this heightened standard but instead uses the preponderance of the evidence or more-likely-than-not standard. The district court applied the Second Circuit’s heightened standard because Revision wanted an injunction to alter the status quo: stopping Balboa from selling the allegedly infringing goggles.

The Federal Circuit held the district court misfired when it applied the Second Circuit’s heightened standard. The Federal Circuit explained that a preliminary injunction enjoining patent infringement “involves substantive matters unique to patent law and, therefore, is governed by the law of this court.” Therefore, district courts are required to apply Federal Circuit law governing the application of the four-factor injunctive relief test. Revision thus did not need to satisfy the Second Circuit’s heightened “clear or substantial” likelihood of success on the merits standard, but instead only needed to satisfy the Federal Circuit’s standard of showing that likelihood of success on the merits was more likely than not.

The case makes clear that when moving for a preliminary injunction or resisting a motion seeking such relief, it is Federal Circuit law that governs the application of the four-factor injunctive relief test. The case is also noteworthy because it continues a Federal Circuit trend of finding more and more issues to fall within the court’s patent-law jurisdiction such that the Federal Circuit either has jurisdiction over the matter – like state-law legal malpractice actions arising from patent prosecution or patent-infringement matters – or Federal Circuit law applies instead of regional circuit court law, like in Revision Military.