The United States Court of Appeals for the Federal Circuit ("Federal Circuit") recently reversed a preliminary injunction enjoining a patentee from making allegations of patent infringement and threatening litigation against a competitor and its customers.
BlephEx, LLC ("BlephEx") is the owner of U.S. Patent 9,039,718 (the "'718 patent"). The '718 patent is generally directed to a method for treating ocular disorders by using an electromechanical device to remove debris present at the eyelid. In 2019, Myco Industries, Inc. ("Myco") began marketing a device called the AB Max to treat anterior blepharitis, an ocular disorder. At a trade show in 2019, BlephEx and Myco both hosted booths displaying their respective products. During the show, a representative from BlephEx allegedly approached Myco and accused Myco's AB Max product of infringing the '718 patent. BlephEx's representative also allegedly stated, in the presence of potential customers, that BlephEx would be "taking action."
Following the exchange, Myco filed an action against BlephEx seeking a declaratory judgement that it was not infringing the '718 patent. Myco also filed a motion for a preliminary injunction to enjoin BlephEx from "making false allegations" that Myco's product infringes the '718 patent and "making baseless threats" against Myco's potential customers. The district court granted Myco's motion after determining that the totality of factors for a preliminary injunction, including (1) likelihood of success on the merits, (2) irreparable injury without the injunction, (3) substantial harm to others, and (4) public interest, weighed in favor of an injunction.
On appeal, the Federal Circuit reversed. The Federal Circuit first explained that a motion seeking to enjoin a party from communicating its patent rights must demonstrate bad faith in the notice of patent rights. Here, because the district court not only failed to make a finding of bad faith, but failed to even consider the requirement, the district court abused its discretion and reversal was warranted.
In reaching its decision, the Federal Circuit declined to infer bad faith from the allegations of infringement against potential customers, who are purportedly immune from patent infringement under the "medical practitioner immunity" provision of § 287(c). The Federal Circuit rejected this argument because the preliminary injunction was not limited to allegations against Myco's customers. It barred BlephEx from making allegations of patent infringement in general. The Federal Circuit also clarified that the plain text of § 287(c) does not state that medical practitioners are "immune from infringement," but rather that a patentee cannot seek a remedy for such infringement. For this reason, "Myco cannot simply hide under the umbrella of § 287(c) and argue that any alleged statements regarding medical practitioner infringement were made in bad faith."
Finally, the Federal Circuit vacated the district court's finding of a "strong likelihood of success" on the non-infringement claim. The district court's determination that the AB Max likely does not infringe the '718 patent was predicated on the finding that the AB Max is promoted for the treatment of anterior blepharitis while the claims of the '718 patent are directed to posterior blepharitis. The Federal Circuit held that the district court's claim construction was faulty in a number of ways. First and foremost, the plain language of the claims does not limit the claimed method to treatment of posterior blepharitis, and the district court did not find that BlephEx disavowed treating anterior blepharitis during prosecution. Moreover, the district court's claim construction improperly focused on BlephEx's commercial embodiment of the invention, rather than the recited limitations of the claims.
Myco Industries, Inc. v. BlephEx, LLC, 2019-2374 (Fed. Cir. Apr. 3, 2020).
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