Addressing preliminary injunction issues in a case between two competitors, the US Court of Appeals for the Federal Circuit affirmed the district court's grant of the injunction, finding that the plaintiff would likely suffer irreparable harm as a result of an "ecosystem effect" that made it difficult to quantify damages. Metalcraft of Mayville, Inc. v. The Toro Co., Case No. 16-2433 (Fed. Cir., Feb. 16, 2017) (Moore, J).
Metalcraft (doing business as Scag) owns a patent directed to a lawnmower with a "suspended operator platform," which suspends the operator's entire body above the mower chassis so that the operator is isolated from vibrations or shocks resulting from rough terrain. After Scag began marketing and selling its suspended operator platform lawnmowers, Toro entered the market with its version of the product. Toro's suspended operator platform lawnmower was not identical, however; Scag's lawnmower included a suspended control platform, while the controls on Toro's mowers were fixed to the chassis. Scag filed an infringement action against Toro and moved for a preliminary injunction. After the district court granted Scag's request for a preliminary injunction, Toro appealed.
Reviewing the district court's grant of the preliminary injunction under an abuse of discretion standard, the Federal Circuit affirmed the district court. For each factor, however, the Federal Circuit reviewed the underlying determinations under their corresponding standards (i.e., reviewing infringement for clear error and reviewing claim construction and obviousness de novo), except for subsidiary factual findings (such as the district court's determination as to motivation to combine), which the Court reviewed for clear error.
The Federal Circuit found no error in the district court's infringement analysis and agreed with the district court's claim construction. On this issue, Toro argued that its mowers did not infringe because its platform did not suspend the "entire body" of the operator as Toro believed the claims required. According to Toro, because its lawnmowers included controls fixed to the chassis, the operator's hands would not be "suspended" when operating the controls. The Federal Circuit rejected this argument, finding that district court correctly determined that the claims did not require the controls to be mounted on the suspended platform.
The Federal Circuit also found that there was no substantial question of validity. On appeal, Toro argued that the district court improperly rejected Toro's motivation to combine certain prior art references. The Federal Circuit found no clear error in this factual determination, noting that Toro provided no explanation for how or why the references would be combined to arrive at the claimed invention.
As to irreparable harm, the district court found that Scag would likely suffer irreparable harm because it would be impossible to quantify Scag's damages. Specifically, testimony of record in the case showed that "ecosystem effects" made it too difficult to quantify harm, because customers who purchased an infringing Toro product may develop loyalty to Toro, continue to buy Toro's products and recommend Toro products to others. Given this unquantifiable, far-reaching and long-term impact on Scag's future revenues, the Federal Circuit agreed that Scag was likely to suffer irreparable harm without a preliminary injunction.
As to the balance of equities, the Federal Circuit found no abuse of discretion in the district court's determination that Scag's hardship in having to compete against its own patented invention outweighed Toro's perceived hardship in disrupting the status quo. Not only would the injunction highlight the importance of encouraging innovation, the public would also continue to have access to the patented system from Scag. For these reasons, the Federal Circuit agreed that the balance of equities favored Scag and that the grant of an injunction was in the public interest.
Appellate Court Mows Down Objections To Preliminary Injunction
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