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Judkins v. HT Window Fashion: Can’t Stop a Patent Holder from Contacting Your Clients About Possible Infringement
Judkins v. HT Window Fashion Corp.
Posted: 05/13/2008
By: John R. Carr, Esq.
Companies Mentioned: HT Window Fashion Corp.
Introduction
When a patent-holder discovers infringement, it’s not unreasonable for him to want to notify the alleged infringer’s clients of the infringement. Of course the alleged infringer would prefer that this communication with its clients not take place. But, as the Judkins case instructs, it will be nearly impossible for an alleged infringer to stop a patent holder from contacting its clients.
Detailed Commentary
Background
Judkins developed a process for manufacturing window coverings in 1991; but, he did not file his application until 1995. Less than one year later, another inventor independently developed a nearly identical process and filed for his own patent. The second patent application proceeded to issuance before the Judkins patent and was assigned to Newell Window Furnishings.
In 1998, Newell filed a patent infringement action against a third party in Illinois – Judkins was not a party to that case, but Judkins’ invention was analyzed in that case as prior art and he testified in the Illinois case. That same year, Judkins sought an interference between the Newell patent and a continuation of his own patent application.
In 1999, a decision was rendered in the Illinois litigation. In its opinion, the Illinois court concluded that Judkins’ had suppressed, concealed or abandoned his invention and therefore his invention was not considered as proper prior art. Still, the Illinois court found Newell’s patent invalid on other grounds.
In 2001, the Board of Patent Appeals and Interferences also ruled in the interference that Judkins had abandoned his invention and was not entitled to a patent. IN short, the Board’s decision and the earlier Illinois court ruling left Judkins with no viable patent application, and Newell with an invalid patent.
Judkins appealed the Board of Patent Appeals’ decision to federal court in Pennsylvania. During the pendency of that appeal, Judkins and Newell entered into a settlement agreement, under which the parties agreed that Judkins was the prior inventor. This agreement would allow the Pennsylvania court to vacate the Board’s prior ruling of abandonment, thus paving the way for Judkins’ to obtain a patent on his continuation application. Under the agreement, Newell obtained a fully paid, perpetual license to any patents that would issue from that application. The Pennsylvania court entered the parties’ proposed order, and a patent was later issued to Judkins.
Right before the patent was issued to Judkins, Judkins sent letters to customers and potential customers of HT Window Fashion Corp., warning them of potential liability for purchasing and using an HT product which allegedly infringed upon the soon-to-be-issued patent. HT filed an action against Judkins, in which it immediately sought a preliminary injunction stopping him from sending the letters. In its moving papers, HT argued that Judkins was sending out the letters in bad faith because he knew that his patent was unenforceable. The district court denied HT’s motion for preliminary injunction against Judkins and HT filed an interlocutory appeal with the Federal Circuit, which affirmed the district court’s decision. Judkins v. HT Window Fashion Corp., 2008 WL 930501 (No. 2007-1434) (Fed. Cir. April 8, 2008).
HT failed to show a likelihood that it would succeed on the merits
In upholding the decision of the district court, the Federal Circuit reiterated the well-known premise that in order to obtain a preliminary injunction, a party has to prove each of the following elements:
“’1) the likelihood that the moving party will success on the merits; 2) the extent to which the moving party will suffer irreparable harm without injunctive relief; 3) the extent to which the nonmoving party will suffer irreparable harm if the injunction is issued; and 4) the public interest.’” (Slip op. p. 6) (quoting McNeil v. Heartland Sweeteners LLC, 511 F.3d 350, 356-57 (3rd Cir. 2007).
Focusing on the first of these four, the Federal Circuit further concluded that HT had failed to show a likelihood of success on the merits. More specifically, the Federal Circuit stated that because HT’s underlying claim was a claim of unfair competition, as defined by Section 43(a) of the Lanham Act, HT would have to “first establish that the activity was undertaken in bad faith” in order to prevail on such a claim, (Slip op. p. 6). The Federal Circuit further iterated that in order to demonstrate “bad faith”, HT would have to prove that Judkins’ claims were objectively baseless, “meaning no reasonable litigant could realistically expect to prevail in a dispute over infringement of the patent.” Id.
Although HT argued that Judkins knew or should have known at the time he sent those letters that his patent was unenforceable based upon his fraudulent and inequitable conduct before the various district courts and the USPTO, the Federal Circuit disagreed. Although it considered all of the allegations of fraudulent and/or inequitable conduct raised and argued by HT, the Federal Circuit believed none of the asserted grounds provided such clear and convincing evidence of fraud or inequitable conduct that Judkins knew or should have known that his patent was invalid. Additionally, the Federal Circuit relied on the legal presumption of the patent’s validity in finding that HT could not meet its burden of showing a likelihood of success on the merits. (Slip op. p. 14).
The motion was not so hopeless as to warrant an attorney’s fees award
In the appeal Judkins requested attorney’s fees and costs, arguing that HT’s interlocutory appeal was frivolous and done solely for the purpose of increasing litigation costs. Judkins based his motion on the premise that the Federal Circuit “almost never reverses the denial of preliminary injunction…” and HT should have known that it would not prevail when it filed its appeal. (Slip op. p. 17).
In addressing the issue of attorney fees, the Federal Circuit noted that it would grant a motion for fees only when an appeal is “clearly hopeless and unquestionably without any possible basis in fact or law.” In this case, the Federal Circuit recognized that while HT faced slim odds of prevailing, “[s]lim is not none.” (Slip op. p. 18). Therefore, because HT did have some hope, no matter how small, at victory, the motion for fees was denied.
Conclusion
The Judkins case tells us that preliminary injunctions designed to prevent a patent holder from asserting his or her rights are unlikely to succeed. More specifically, given the fact that issued patents are presumptively valid, and that a defendant challenging the validity or enforceability of a patent must do so by clear and convincing evidence, a patent infringement defendant is not likely to be able to preliminarily enjoin a plaintiff from notifying the defendant’s customers about the potential infringement.
The author, John R. Carr, Esq., is a counsel of Zuber & Taillieu LLP, specializing in patent prosecutions and interferences, and trademark prosecutions, oppositions and cancellations.
Patent Law Summary
Read the related Patent Law summary: Patent Owners Allowed to Warn Buyers about Competitor's Infringing Products: Judkins v. HT Window Fashion Corp.
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