Wednesday, December 26, 2012

Summary Judgment of Noninfringement Warrants Injunction Against Parallel Customer Suits

Following its grant of summary judgment of noninfringement, the court granted plaintiffs' motion to enjoin defendant from pursuing infringement claims against plaintiffs' customers, licensees, distributors, users, and suppliers in another forum. "[I]n terms of the first element of injunctive relief of enjoining the lawsuit, enjoining [declaratory judgment defendant] from pursuing lawsuits, either those pending or new lawsuits relating to the [patents-in-suit] and relating to [accused products], since my ruling [granting summary judgment of noninfringement] is currently the ruling, [Kessler v. Eldred, 206 U.S. 285 (1907)] indicates that there is a very strong overwhelming likelihood of success on the merits. . . . In terms of the element of irreparable harm, the Court also finds that element has been met. There are difficulties and uncertainties in quantifying the harm of customers who are being sued for their use of a product, which the entity which sold it to them has been found not to be infringing on the suing parties' patent. And the impact on the good will of those customer lawsuits . . . is uncertain and difficult to quantify. The Kessler case, the Court notes, found that there was in fact a difficulty in quantifying the impact on good will. And the Kessler court also said it would be difficult at law to prove the adequacy of money damages. The Court adopts that rationale here."

SAP AG, et. al. v. Datatern, Inc., 1-11-cv-02648 (NYSD December 19, 2012, Order) (Forrest, J.).

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