II. HISTORY OF THE CURRENT STANDARDS

The leading case law on the standard for preliminary injunctive relief in patent cases consists of Simson Bros. v. Blancard & Co. 21 and Rosenberg v. Groov-Pin Corp., 22 two decisions written by Judge Learned Hand for the Court of Appeals for the Second Circuit. In Simson, decided in 1927, the court articulated the classic statement of the rule: a preliminary injunction should be granted only when the patent is "beyond question valid and infringed."23 In Rosenberg, decided nine years later, the court stated that “in the absence of long acquiescence or adjudication [a preliminary] injunction will not go."24 Notwithstanding the presumption of validity generally granted to an issued patent,25 the court noted that a competitor has a greater incentive than a patent examiner to exhaust prior art references. 26

The standard for preliminary injunctions in patent suits that emerged from Simson and Rosenberg, therefore, required proof beyond doubt of the validity and infringement of the patent. These decisions identified two classes of patents likely to satisfy this test: those previously adjudicated valid and those in whose validity the industry had acquiesced." The

otic drugs. Id at 814. Eli Lilly established the patents' validity by presenting evidence of industry acquiescence. See id. at 822. The court viewed Zenith's admissions that it solicited orders and sold the disputed antibiotics as admissions of infringement. See id at 825. The court found that the invasion of Eli Lilly's patents constituted irreparable harm. See id. In support of its decision to grant a preliminary injunction, the court in Zenith cited public interest factors, including the following Eli Lilly's initial development and continued testing of the antibiotics. Eli Lilly's potential lost profits if Zenith were allowed to continue its infringement; the common practice of drug companies entering the market with similar products while the original patent is being challenged, and the costs of continued litigation, which would deplete Eli Lilly's resources, and thereby hinder research and development. See id

23

Simson Bros. v. Blancard & Co., 22 F.2d 498, 499 (2d Cir. 1927). The court reviewed prior art references, questioned whether the jewelry setting patent in issue had in fact been invented, and held that preliminary relief was unwarranted. Id

24

Rosenberg v. Groov-Pin Corp., 81 F.2d 46, 47 (2d Cir. 1936). Of the two patents for metal pins allegedly infringed, one had previously been adjudicated valid. The question of infringement, however, hinged on whether the disputed material had the same performance capabil ity as the patented material. Id. at 46. Because the court was not willing to decide this factual issue on the affidavits, a trial was necessary and preliminary injunctive relief was denied. Id. at 48. 25. Id at 47.

26 Id The court in Rosenberg stated that industry acquiescence was the equivalent of adjudication. Id. According to Judge Hand, the rationale for equating acquiescence with adjudication is that industry competitors would naturally have contested a patent of doubtful validity. Id at 48. In this case, the new prior art reference introduced by the alleged infringer on appeal cast doubt on the validity of the patent and injunctive relief was denied. Id at 46.

Perhaps another explanation for the courts' reluctance to grant preliminary relief in patent cases is the difficulty of the subject matter. Focusing on the question of infringement, one nineteenth century court referred to the difficult legal questions involved, and the "painful necessity of spend. ing our whole vacations in anticipating and duplicating these long and difficult investigations, and trying the merits of every case on these preliminary motions." Parker v. Sears, 18 F. Cas. 1159, 1160-61 (E.D Pa. 1850) (No. 10,748).

requirements for preliminary injunctions enunciated in these cases were reaffirmed in 1971 by the Second Circuit in Carter-Wallace, Inc. v. DavisEdwards Pharmacal Corp. 20

28

The court in the Simson and Carter-Wallace decisions relied on nineteenth and early twentieth century cases to support the stringent rule on patent validity.29 The earliest case cited 30 refers to an 1880 decision in which a district court noted that for more than half a century a movant in a patent case had been required to show that his patent had been in use, and undisputed, for long enough to establish prima facie its validity. In fact, even earlier cases had required that preliminary injunctive relief be denied “if there were any real doubts" concerning the patent's validity.32 Courts also recognized that exclusive possession of the patent right for a considerable time warranted the issuance of a preliminary injunction without the need to adjudicate the validity of the patent.

31

The stringent test for infringement is found in early twentieth century cases as well. A "fair" doubt regarding infringement has precluded injunctive relief. Without addressing the standard for establishing infringement as a separate element, one court stated that a case wholly free from reasonable doubt was necessary for a grant of preliminary injunctive relief.35

28 443 F.2d 867 (2d Cir. 1971), cert. denied, 412 U.S. 929 (1973). Citing Judge Hand's rayonale in Rosemberg that competitors are better investigators of patent validity than Patent Office examiners, the court in Carter-Wallace noted that "more than 80% of patent infringement actions on appeal result in a determination that the patent sued upon is invalid." Id. at 872

29 See Carter-Wallace, Inc. v. Davis-Edwards Pharmacal Corp, 443 F.2d 867, 871 (2d Cir. 1971), cert. denied, 412 U S. 929 (1973); Simson Bros. v. Blancard & Co., 22 F.2d 498, 499 (2d Cir. 1927).

30.

31.

Dickerson v. De la Vergne Refrigerating Mach. Co., 35 F. 143 (C.C.S.D N.Y. 1888) Kirby Bung Mfg. Co. v. White, I F. 604, 606 (C.C.E.D. Mo. 1880), cited in id. at 144. 32. See Thomas v. Weeks, 23 F. Cas. 978, 980 (C.C.S.D.N.Y. 1827) (No. 13,914). See also Grover & Baker Sewing Mach. Co. v. Williams, 11 F. Cas. 83, 87 (C.C.D. Mass. 1860) (No. 5,847) (substantial doubts as to validity of plaintiffs' right or defendants' alleged infringement precluded grant of preliminary injunction); Winans v. Eaton, 30 F. Cas. 262, 264 (CCNDNY 1854) (No 17,861) (reasonable doubt surrounding originality of improvement precluded issuance of preliminary injunction); Isaacs v. Cooper, 13 F. Cas. 153 (C.C. Pa. 1821) (glaring defects in patent precluded grant of preliminary injunction against alleged infringer). Cf Irwin v. Dane, 13 F. Cas. 116. 117 (C.C.N.D. III. 1871) (No. 7,081) (given greater likelihood of substantial or irreparable injury to complainant than to defendant, showing of “prima facie case of infringement ̈ sufficient for preliminary injunction). Nineteenth century courts also noted that preliminary injunctive relief could be denied on a "clear" showing of infringement. See Hodge v. Hudson River RR, 12 F. Cas. 276, 278 (C.C.S.D.NY. 1868) (No. 6,560); Potter v. Muller, 19 F. Cas. 1170, 1170 (C.C.S.D. Ohio 1864) (No. 11,334): Poppenhusen v. New York Gutta Percha Comb Co., 19 F. Cas. 1056, 1057 (C C.S.D.N Y. 1858) (No. 11,281).

33. Thomas v. Weeks, 23 F. Cas. 978, 980 (C.C.S DNY. 1827) (No. 13,914), Sullivan v. Redfield, 23 F. Cas. 357, 360 (C.C.D.N.Y. 1825) (No. 13,597).

34. Newhall v. McCabe, 125 F. 919, 921 (2d Cir. 1903) (citing Dickerson v. De la Vergne Refrigerating Mach Co., 35 F. 143 (C.C.S.D.N.Y. 1888))

35. George Cutter Co. v. Metropolitan Elec. Mfg. Co., 275 F. 158, 164 (2d Cir. 1921) See Hildrith v. Norton, 159 F. 428, 429 (2d Cir. 1908) (injunction denied because validity and infringement vigorously disputed).

The principal rationale offered by the courts in the earliest patent cases for the burdensome test for injunctive relief was not peculiar to patent law: rather, it derived from basic principles of equity. Courts of equity granted injunctive relief in aid of the common law under which the patentee's legal right was being infringed. 36 Courts of law admonished courts of equity not to grant an injunction upon a doubtful right, or upon an assumption that the right had been infringed. 37 The Supreme Court stated the rule concerning the issuance of injunctions in Alexander v. Pendleton, 38 an early quiet title case. The Court stated that a court of equity should quiet title only in a clear case and should deny relief if the right were doubtful.39 The Supreme Court applied the same principle in a later case dealing specifically with a preliminary injunction, stating that relief would issue only upon the plaintiff's showing of a clear, firm case of right. State courts of equity also applied this test in the early nineteenth century.*

40

41

In essence, therefore, early courts of equity required proof of a clear, firm case of right for preliminary or final injunctive relief for nonpatentees and patentees alike. Since then, the standard for preliminary relief outside the patent area has been relaxed until in the Second Circuit preliminary relief is available even without proof of a likelihood of success on the merits.2 The present requirements,*3 which include a showing of likely irreparable injury in all cases, were fixed in 1976 in Triebwasser & Katz v. American Telephone & Telegraph Co. In the patent

36. See. g. Thomas v. Weeks, 23 F Cas. 978, 980 (C.C.S.D NY. 1827) (No. 13,914) (equity will aid law only absent doubt that patent infringed). In Dickerson v. De la Vergne Refrigerating Mach. Co. 35 F 143 (C.C.S.D.NY. 1888), the court observed that courts continually declined to recognize the presumption of validity attendant on letters patent because of distrust of patent officials. Id at 144

Dickerson v. De la Vergne Refrigerating Mach. Co., 35 F. 143, 144 (C.C.S.D.N.Y. 1888). 12 US. (8 Cranch) 462, 468 (1814)

37.

38

40

Parker v. Winnipiscogee Lake Cotton & Woolen Co, 67 U.S. (2 Black) 545, 552 (1862)

inuisance suit).

41 See, eg, Charles River Bridge v. Warren Bridge, 24 Mass. (7 Pick.) 344 (1829), aff‍'d, 36 US (11 Pet 420 (1837), Morris Canal & Banking Co. v. Society for Establishing Useful Manufac tures. 5 NJ Eq 202, 221-22 (N.J. Ch. 1845), Hart v. Mayor of Albany, 3 Paige Ch. 213, 214 (N.Y Ch 1832) Scott v. Burton, 2 Ashm. 312, 330 (1st Jud. D. Pa. 1840),

42. See supra notes 8-9 and accompanying text. The Second Circuit came to hold that the standard for demonstrating probable success on the merits was less stringent in cases in which the balance of hardships favored the movant. See, eg, Dino De Laurentiis Cinematografica, S.p.A. v. D-150, Inc., 366 F.2d 373, 375 (2d Cir. 1966). At one point the Second Circuit held that the party seeking the injunction did not have to show irreparable injury if the balance of hardships tilted decidedly in its favor See Sonesta Int'l Hotels Corp. v. Wellington Assoc, 483 F.2d 247, 250 (2d Cir. 1973). In Sonesta the court held that a preliminary injunction could be granted upon either a clear showing of probable success on the merits and possible irreparable injury, or sufficiently serious questions on the merits to establish a fair ground for litigation and equities favoring the

movant

43. See supra text accompanying notes 8-9.

44

535 F.2d 1356 (2d Cir. 1976). In Triebwasser & Katz, the court held that a satisfactory

area, however, the stringent standard for preliminary relief has not been relaxed. The clear case of right, in the form of the "beyond doubt” test, still is required of patentees seeking preliminary injunctions.

III. EFFECT OF THE EXTRA BURDEN ON PATENTEES

The extra burden imposed on patentees makes it difficult to obtain a preliminary injunction. A twenty-five-year survey of patent actions for preliminary injunctions indicates a success rate of 41% at the district court level and 32% at the appellate level. These figures are inflated because they include the exceptions to the "beyond doubt" rule: instances of prior adjudication and industry acquiescence. Furthermore, they do not reflect the instances in which motions for preliminary relief were never brought because of the stringent standard. Although ratistics are not available, it is reasonable to infer that preliminary injunc

showing of irreparable injury was always necessary for a preliminary injunction because equirs could not act when money damages would compensate for an injury Id. at 1359

45. The standard of proof of irreparable injury has become stricter as well. Originally, a patentee had only to demonstrate, with the requisite proof, an interference with his right to exclusive use, assumed to be irreparable for purposes of preliminary relief. See Gibson v Van Dresar, 10 F. Cas. 329, 334 (C.C.N.D.NY. 1850) (No. 5,402) (njunction granted with no discussion of irrepa rable injury). As the 19th century progressed, some courts examined the issue of irreparable injury in relation to the balance of hardships in patent cases. See Bowers Dredging Co v New York Dredging Co., 77 F. 980, 984 (C.C.W D. Wash 1896) (burden on complainant to prove irreparable injury. Potter v. Whitney. 19 F Cas. 1191, 1192 (C.C.D. Mass. 1866) (No. 11,341) sin unique circumstances, decision to issue injunction should consider balance of equities), Moins v Lowell Mfg. Co., 17 F. Cas 822. 823 (C.CD. Mass. 1866) (No 9.833) before issuing injunction, court considers situation of parties and potential harm to defendants). See also, eg, Silver & Co. v. JP Eustis Mfg. Co.. 130 F. 348, 350 (C.C.D. Mass. 1904) (balance of hardships in favor of defendant). Hockholzer v. Eager, 12 F. Cas 269, 270 (CCD Nev 1873) (No. 6,556) (same). By the time Judge Hand wrote his opinions on the subject, however, some courts still granted preliminary relief without inquiring into the particular hardships involved. See, eg, Hilditch v American Bumper Corp. 15 F.2d 451, 452 (E.D.N.Y. 1926). Some courts continued to regard the loss of exclusivity as irreparable injury. See id. General Elec. Co. v. Wise. 119 F. 922, 924 (N.D.NY 1903).

་

Irreparable injury was one of the requirements for a preliminary injunction in the early 19th century outside the patent area. See Charles River Bridge v. Warren Bridge. 24 Mass (7 Pick + 444. 401 (1829), aff'd, 36 U.S. (11 Pet.) 420 (1837). Conversely, when there was an adequate remedy at law, equity had to stay its hand. See, eg, Hart v. Mavor of Albany. 3 Paige Ch. 213, 214 NY Ch 1832) Further, preliminary injunctions were available to prevent interference with exclusive rights generally, without proof of inability to calculate monetary losses See Osborny Bank of the United States, 22 U.S. (9 Wheat) 738 (1824) (government suit to prevent enforcement of state tax that would have destroved national bank). In Osborn the Supreme Court observed that injunctions were often used to prevent interference with exclusive franchises. "The injury done, by denying to the bank the exercise of its franchise in the state of Ohio, is as difficult to calculate, as the injury done by participating in an exclusive privilege." Id. at 841-42. See also Lavingston v Ogden. 4 Johns Ch 48 (NY. Ch. 1819) (injunction granted to protect steamboat's exclusive right to navigates. Thus, it is evident that the irreparable injury requirement of the preliminary injunction standard has been made harsher as well.

47 Id at 608-11 A federal court decree sustaining a patent after a full hearing constitutes very strong evidence of a patent's validity. Id. at 608. The prior adjudication, however, must have been fully contested and must have encompassed the issues of the present suit Id. A prior decree entered by default is insufficient proof of a patent's validity. Id

tions are more often sought and obtained in other causes of action not burdened by the "beyond doubt" standard.

According to the survey, the most common ground for denial of preliminary relief in patent cases is a finding that the patent is not clearly valid. The second most frequent ground is a failure to show irreparable harm. In most patent cases, therefore, a preliminary injunction against patent infringement does not issue unless there is a history of acquiescence respecting the relevant patent or a prior adjudication upholding its validity—the exceptions built into the "beyond question" rule. In one notable case, however, the absence of the requirement of acquiescence or prior adjudication was not determinative 50 The court concluded that, after six months of litigation, it was in a position to determine whether the patents were "probably" valid and "probably" infringed and granted a preliminary injunction under this less strict

test. 51

The relative inability of a patentee to obtain preliminary relief puts a patentee who wishes to stop infringement in a difficult position. For the year ending June 30, 1982, the median length of litigation in the federal district courts of patent cases proceeding to trial was thirty-six months. 32 Ten percent of these cases lasted longer than seventy-seven months.53 Figures for preceding years are not significantly different. A determined infringer, consequently, often can use the patent for more than three years until trial and judgment. During this period an alleged in

48. Id. at 599.

49. Id

50. Teledyne Indus. v. Windmere Prods, 433 F. Supp. 710 (S.D. Fla. 1977). In Teledyne a showerhead manufacturer sought a temporary injunction against the marketing of a similar imported device that allegedly infringed Teledyne's patent rights. The patents in question were ob tained in 1973, 1974, and 1976-too recently, in the eyes of the court, to support a finding of a history of industry acquiescence. The court stated, however, that long acquiescence and prior adju dication were not the only means of ensuring that all prior art had been brought before the court. Id. at 713.

51 Id at 713-14. The court relied on evidence that it was likely that Teledyne would succeed on the merits and would suffer irreparable harm if relief were not granted. Id at 714 In Ryan v Ideal Toy Corp., 260 F. Supp. 828 (C.D. Cal. 1966), overruled in Mayview Corp. v. Rodstein, 480 F.2d 714 (9th Cir. 1973), the court issued a preliminary injunction without acquiescence, prior adju dication, or a bevond doubt showing that the patent was valid and infringed, requiring only a "strong probability" of validity and infringement. Id. at 832. The court in Ryan, however, relied upon two Supreme Court holdings that dealt with permanent injunctions granted after a trial on the merits, not with preliminary relief. See Mumm v. Jacob E. Decker & Sons, 301 U.S. 168 (1937): Radio Corp. of Am. v. Radio Eng'g Labs., Inc., 293 U.S. 1 (1934). Moreover, the Ryan decision was expressly overruled in Mayview Corp. v. Rodstein, 480 F.2d 714, 717-18 (9th Cir. 1973). See also Carter-Wallace, Inc. v. Davis-Edwards Pharmacal Corp., 443 F.2d 867, 872 n.5 (2d Cir. 1971) (noting that Ninth Circuit should decide whether decision in Ryan stated relaxed rule too emphatically), cert denied, 412 U.S. 929 (1973),

52 ADMINISTRATIVE OFFICE OF THE U.S. COURTS, 1982 ANNUAL REPORT OF THE DIKECTOR 253

54.

ADMINISTRAtive OfficE OF THE U.S. COURTS, 1981 ANNUAL REPORT OF THE DIREC

TOR A-32.