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of the contributory infringement statute that would have compelled the patentee to license others to sell the unpatented chemical for use in the patented method.111 The Supreme Court observed that, under such a rule, competing sellers could readily “free-ride” by awaiting the oue. by demanding licenses to sell the unpatented chemical essential to the come of the patentee's research efforts and then reap substantial profil newly developed process. 112

The Court of Appeals for the Second Circuit, by holding that palen! that later confer monopoly power can be acquired under the antitrus laws,''3 emphasized the importance of patents as an incentive to dere: opment that should be protected from antitrust exposure if the develop ment succeeds commercially.''* Similarly, the Court of Appeals for inte Third Circuit determined that the public interest favored the patenice and not the creation of competition through infringement,'s granted a preliminary injunction against the defendant's patene vita fringement even though the defendant was selling the infringing drue "at a significantly lower price” than the patentee.' served that, unless the investment of human and capital resources quired by chemical research is rewarded by some form of paten: protection, major drug manufacturing companies might forego sucs large expenditures and divert their resources from the socially beneficia development of new drugs."'? The courts therefore have adhered to the congressional mandate of encouraging patented developments over de

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111. Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 22! (1980). The Count sa sion rested on the construction of 35 U.S.C. & 271 (1976), which codifies the patent intring doctrine. The statute provides that:

(c) Whoever sells a component of a patented composition constituting material part of the invention, knowing the same to be especially made or espoile adapted for use in an infringement of such patent, and not a staple article or commoditi of commerce suitable for substantial noninfringing use, shall be liable as a contribution infringer.

(d) no patent owner otherwise enuiled to relief for infringement or contributor : fringement of a patent shall be denied relief or deemed guilty of misuse or illegal curs sion of the parent right by reason of his having done one or more of the fullsia (l) derived revenue from acts which is performed by another without his consent wat constitute contributory infringement of the patent: (2) licensed or authorized the perform acts which is performed without his consent would constitute contributier. fringement of the patent; (3) sought to enforce his patent rights against infringemen:

contributorv infringement. Sve supra note 103.

112. Dawson Chem. Co. v. Rohm & Haas Co., +48 U.S. 176, 222 (1980)

113. SCM Corp. v. Xerox Corp., 645 F.2d 1195 (2d Cir 1981), cot. denird, tiil (1982).

114. Id at 1206 (threat of treble damage liability for refusal to license patented in should not deter commercial exploitation of invention).

115 Eli Lilly & Co. v. Premo Pharmaceutical Labs., Inc., 630 F.2d 120 (3d Cur 449 L'.S. 101+ (1980).

116. Id at 137

117. Id. (patent is means of inducing investment in research instead of in produitno man improvement programs, advertising, increased customer service, or the like")

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policy of free competition."

On the other hand, the philosophy favoring removal of unwarranted interferences with competition has resulted in two significant developments in the law in the last tifteen years. In Lear, Inc. v. Adkins, 119 the Supreme Court abolished the doctrine of licensee estoppel to hold a pateni invalid on the grounds that the public interest in permitting full and free competition in the use of ideas outweighed the equities of the licen

120 The Court concluded that a licensee could question the validity of a patent--which represents a determination by the Patent Office made without the aid of adversary arguments—particularly because the licensor's case was supported by the presumption of validity. 121

Soon thereafter, the Supreme Court swept away the doctrine of muluality of estoppel in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation. 122 The Court overturned the rule that a patentee whose patent had been adjudged invalid could assert it against other defendants, holding that such a patentee was estopped from relitigating the validity of his parent.123 Although the Court conceded the “extreme intricacy” of patent issues, it reasoned that patentees would be able to present all relevant evidence in the first litigation.'24 Furthermore, given that the presumption of patent validity favors patentees, the Court concluded that the high costs of repeated patent litigation were wasteful and that the patentee could put its funds to better uses, such as further research and development.125

The Supreme Court's holdings in these cases encourage challenges to patents in order to free the channels of competition from invalid patents. The Court expressed the “consistent view” that a patentee should not be insulated from suit if the patented idea is in fact not patentable or is exploited in a manner beyond the scope of the patent monopoly. 126 These decisions increase the number of potential challengers of patents and reduce the patentee's chances for success because although one loss will be dispositive, the patentee must win on validity against every infringer. This result, however, does not nullify valid patents; nor does it require a higher standard of proof for protection of valid patents. Indeed, the Court observed that patentees were “heavily favored as a class

118 119. 120 121 122 123 124. 125. 126.

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of litigants” by the presumption of validity. 127 The cases weighing patents in the balance with competitive policy clearly indicate respect for the patent right and the presumption of validity, and, therefore, favor treating patentees equally with other plaintiffs in preliminary injunction proceedings.

C. Conflict with the Standard in Analogous Areas of Law Imposition of the extra burden under the statutory presumption of patent validity does not comport with the respect accorded the presumptions of validity for copyrights 128 and trademarks. 29 In the latter areas, the traditional standard for preliminary relief prevails: a party seeking a preliminary injunction must demonstrate only a likelihood of success on the merits. In copyright cases, therefore, a preliminary injunction will be granted once the plaintiff makes a prima facie showing of his right. 130 Presenting the certificate of registration usually is sufficient.131 Similarly, courts deciding cases arising under the Lanham

127. Id at 335

i 28 The relevant portion of the 1976 Copyright Act states that “in any judicial proceedings the certificate of a registration shall constituie prima facie evidence of the validity of the copy. right and of the facts stated in the certificate. The evidentiary weight to be accorded the certificate of a registration made thereafter shall be within the discretion of the court." 17 C.S.C. $ +10(c) (1976 & Supp. V 1981).

129. The Trademark Act of 1946 (the Lanham Act) provides in pertinent part: "A certificate of registration of a mark upon the principal register provided by this chapter shall be prima facic evidence of validity of the registration .." 15 US.C. § 1057(b) (1976). 130.

Novelty Textile Mills, Inc. v. Joan Fabrics Corp., 558 F 2d 1090, 1094 (2d Cir. 1977) (quoting Houghion Mifflin Co v. Stackpole Sons, Inc., 101 F.2d 306. 307 (2d Cir.).col denied, 308 C.S. 597 (1939)). The rationale underlying the issuance of a preliminary injunction upon a showing of a certificate of registration is that a court may presume that a copyright holder has suffered irreparable injury when another has invaded his exclusive use of the copyrighted materi Id. (incidentally relying on plaintiff's independent evidence of irreparable injurv). Anord Martin Lu. ther King Jr Center for Social Change, Inc 4. American Heritage Prods.. 508 F. Supp. 85+. 861 (V.D. Ga 1981) (proof of valid copyright and prima facie case of infringement entitles plainuiff to preliminary injunction without proof of irreparable harm), vnd on other grounds. 691 F.2d 674 (11th Cir. 1983), Northwestern Bell Tel. Co. v. Bedco, Inc., 501 F. Supp. 299, 303 (D. Minn 1980) (irreparable injury presumed if plainut shows copyright infringement). Metro-Goldwyn-Maver, Inc. is Showcase Atlanta Coop. Prods., 179 E Supp. 351, 362 (ND Ga. 1979) (proof of copyright infringement invokes presumption of irreparable injury for purpose of preliminary injunction). Miller Brewing Co. v. Carling O'Keefe Breweries of Canada, Lid.. 452 F. Supp. 129, 437 (W.D.XY. 1978) (copyright infringement raises presumption of irreparable harm). Encyclopaedia Britannica Educ. Corp. v. Crooks, ++7 F. Supp. 243, 247 (W.DNY 1978) (prima facie case of infringement raises presumption of irreparable harm); Walt Disney Prods. 6 Air Pirates, 345 F. Supp. 108, 110 IND. Cal. 1972) (irreparable injury presumed from showing of valid copyright), affd in pari and ridin parl, 581 F.2d 751 (9th Cir. 1978), cot denud sub nom. O'Neill v. Walt Disney Prods., +39 C.S 1132 (1979); L'niversal Athletic Sales Co. v. Salkeld, 340 F. Supp. 899. 902 (WD. Pa 1972) (proof of prima facie case of infringement and likelihood of success on merits obviates need for detailed evidence of irreparable harm). For a departure from the norm in copyright cases, see Warner Bros. v. Film Ventures Int'l. 403 F. Supp. 522, 525 (C.D. Cal 1975) (preliminary injunction requires showing of "reasonable certainty (not just likelihood that plaintiffs will prevail as a inal on the merits').

131 See, eg.. Herbere Rosenthal Jewelry Corp. v. Grossbarde, 428 F.2d 551, 553 (20 Cir. 1970) (certificate of registration prima facie evidence of copyright validity). Dollcraft Indus. v. Well. Made Toy Mfg. Co., 479 F. Supp. 1105, 1114 (E. D.N.Y. 1978) (same).

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Act 132 require only that the trademark owner satisfy the general criteria for a preliminary injunction; courts presume the validity of the trademark right from the registration.133 The construction of the presumption of validity in this manner in trademark and copyright cases suggests that a similar meaningful presumption should apply in patent prelimi. nary injunction matters.

D. Conflict with the Jurisprudence of Individual Merit One rationale for the stringent rule is that the validity of patents is. sued by the Patent Office is statistically so unreliable that a harsh standard is compelled in actions for preliminary relief. In a 1971 case, Judge Friendly cited a study showing that “more than 80% of patent infringement actions on appeal result in a determination that the patent sued upon is invalid.”134 Two recent five-year studies conducted by the Pat. ent and Trademark Office 35 showed overall invalidity rates of 49% for the years 1968-1972 and 55% for 1973-1977. The invalidity rates in appellate determinations were 69% and 70%, respectively. 130

Norms of invalidity, however, do not justify imposition of an extraordinary standard of proof on an individual litigant for a preliminary injunction. A particular patentee may be able to prove the likelihood of prevailing on the merits, despite the fact that one patent in iwo is found invalid. The logic of the stringent rule is that because a relatively high proportion of a sample of parents were held invalid at the appellate level, all other patents that will be litigated are likely to be held invalid. This logic is inconsistent with the basic precept of our jurisprudence that each case should be decided on its own merits, and not by reference to norms for cases of particular kinds.

132 Ch 540, 60 Stat. 427 (1946) (codified as amended at 15 U.S.C. SS 1051-1127 (1976)). 133

Sve Keebler Co. v. Rovira Biscuit Corp.. 624 F. 2d 366, 373 (ist Cir. 1980) (trademark registration shifts burden of proof from plaintiff to defendanı, who must rebut presumption of plaintiff's right to exclusive use). The Lanham Act provides in pertinent part:

(a) Any registration issued under the Act of March 3. 1881, or the Act of Februan 20. 1905, or of a mark registered on the principal register provided by this chapter and owned by a party to an action shall be admissible in evidence and shall be prima facie evidence of registrant's exclusive right to use the registered mark in corumerce on the goods or services specified in the registration subject to any conditions or limitations stated therein. bu shall not preclude an opposing party from proving any legal or equitable defense or

delect which might have been asserted if such mark had not been registered Ch. 510. § 33, 60 Stat +27, 438 (1946) (current version at 15 U.S.C. $ 11151a) (1976)).

134 Carier. Wallace, Inc. v. Davis-Edwards Pharmacal Corp., 143 F.2d 867, 872 (2d Cir. 1971). cat. denied, +12 U.S. 929 (1973).

135. PATENT & TRADEMARK OFFICE, U.S. DEP'T COMMERCE, 989 OFFICIAL GAZETTE, Dec. 4, 1979. at OG 2. The statistics were compiled from notices filed by court clerks pursuant to statute and also from reported decisions. The rates were calculated by examining the status of the patent at the end of the litigation, whether in the district court, court of claims, or court of appeals.

136. Id

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Nor should the stringent rule be a guise for avoiding the technical difficulty of patent subject matter. Courts have proved themselves capa. ble of considering the substance of validity issues on motions for prelimi. nary injunctions, 137 and the Supreme Court has noted that patent cases present “difficulties comparable to those encountered daily by the courts in such frames of reference as negligence and scienter."134 If the alleged infringer can cite pertinent new art against the patent, a district court should consider it on a motion for preliminary injunction and determine whether the patentee, nevertheless, has a reasonable likelihood of success on the merits, without simply resorting to the equivalent of an automatic rule of rejection.

CONCLUSION The competing policies at work in the patent arena are sympathetic to patent rights and to encouraging innovation by according legal respect to such rights. At a minimum, they warrant treatment for patentees equal to that accorded other plaintiffs in the preliminary injunction context. Patentees should not start a preliminary injunction proceeding with an extra burden in the form of a presumption of invalidity.

137. See, eg, Carter-Wallace, Inc. v. Davis-Edwards Pharmacal Corp., H3 F 2d 867 (28 Cır. 1971),cert denied, +12 U.S. 929 (1973), Simson Bros. v. Blancard & Co., ?2 F 2d 198 (2d Cir. 1977)

138 Blonder-Tongue Labs, Inc. v. University of III. Found., +02 U.S. 313, 331 (1971). Graham v. John Deere Co., 383 U.S. 1, 18 (1966)

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