GENBAND U.S. LLC, Plaintiff-Appellant
METASWITCH NETWORKS CORP., METASWITCH NETWORKS LTD., Defendants-Appellees
from the United States District Court for the Eastern
District of Texas in No. 2:14-cv-00033-JRG, Judge J. Rodney
Douglas M. Kubehl, Baker Botts, LLP, Dallas, TX, argued for
plaintiff-appellant. Also represented by Jeffery D. Baxter,
Samara Kline; Michael Hawes, Houston, TX.
Charles Kramer Verhoeven, Quinn Emanuel Ur-quhart &
Sullivan, LLP, San Francisco, CA, argued for
defendants-appellees. Also represented by Kevin Alexander
Smith, David Eiseman, IV; Joshua L. Sohn, Washington, DC.
Lourie, Taranto, and Chen, Circuit Judges.
TARANTO, CIRCUIT JUDGE.
Genband U.S. LLC sued Metaswitch Networks Corp. and
Metaswitch Networks Ltd. (together, Metaswitch) for patent
infringement. After a jury found that Metaswitch infringed
various claims of several of Genband's patents, and that
the claims at issue had not been proven invalid, Genband
sought a permanent injunction. The district court denied the
request, concluding that Genband had not established
irreparable harm from the infringing activities. That
conclusion, however, may have relied on too stringent an
interpretation of the requirement, for an injunction, that
the allegedly irreparable harm is being caused by the
infringement. Based on the district court's opinion and
the briefing in this court, moreover, we cannot be confident
of the answer to the causation question under the standard
properly governing the inquiry or whether there is any
independent ground for finding no irreparable harm or
otherwise denying an injunction. Accordingly, we vacate the
denial of the injunction and remand for reconsideration.
sells products and services that help telecommunications
companies offer voice-communications services over Internet
Protocol networks, i.e., "voice over IP"
(VoIP) services. Genband owns a number of patents related to
its offerings, some of them acquired in 2010 when it
purchased the Carrier VoIP and Application Solutions line of
business from Nortel Networks Inc. out of Nortel's
bankruptcy. Metaswitch sells telecommunications products and
services that compete with Genband's offerings, though
Metaswitch was not a major competitor until recent years.
See Genband U.S. LLC v. Metaswitch Networks Ltd, 211
F.Supp.3d 858, 865-66, 871-72 (E.D. Tex. 2016).
January 21, 2014, Genband filed a complaint against
Metaswitch in the United States District Court for the
Eastern District of Texas, alleging that certain Metaswitch
products infringed and/or continue to infringe seven U.S.
patents owned by Genband: U.S. Patents Nos. 6, 772, 210; 6,
791, 971; 6, 885, 658; 6, 934, 279; 7, 995, 589; 7, 047, 561;
7, 184, 427; and 7, 990, 984. See id. at 866-69. The
lawsuit proceeded to a jury trial in January 2016, and the
jury found that Metaswitch infringed all asserted claims and
that those claims were not invalid. Id. at 868. The
jury awarded $8, 168, 400 in damages. Id.
district court thereafter held a bench trial to address
various matters, including equitable defenses and
Genband's request for a permanent injunction.
Id. On September 29, 2016, the district court issued
an opinion and order containing extensive findings of fact
and accompanying conclusions of law. Among other things, the
court rejected Metaswitch's equitable defenses, including
laches, finding no unreasonable delay by Genband in asserting
the patents. Id. at 895-901.
court also denied Genband's request for a permanent
injunction. Id. at 894-95. The district court rested
its denial entirely on the determination that Genband failed
to show that it would suffer irreparable harm from
Metaswitch's continued infringement. The court gave two
reasons, without indicating that the second reason
independently supported its determination.
the court held that Genband did not demonstrate a causal
nexus between the alleged irreparable harm (based on lost
sales) and the presence of the infringing features in
Metaswitch's infringing products. Id. at 894-95.
In so ruling, the district court stated that "it is
Genband's burden to demonstrate that the patented
features drive demand for the product." Id. at
894. The court borrowed certain language from this
court's decision in Apple, Inc. v. Samsung
Electronics Co. (Apple II), 695 F.3d 1370, 1375
(Fed. Cir. 2012) ("The patentee must . . . show that the
infringing feature drives consumer demand for the accused
product."), which in turn relied on similar language in
Apple, Inc. v. Samsung Electronics Co. (Apple
I), 678 F.3d 1314, 1324 (Fed. Cir. 2012) ("If the
patented feature does not drive the demand for the product,
sales would be lost even if the offending feature were absent
from the accused product."). Before reiterating the
"drive demand" principle, the district court quoted
this court's statement in Apple, Inc. v. Samsung
Electronics Co. (Apple III), 735 F.3d 1352,
1364 (Fed. Cir. 2013), that "this inquiry should focus
on the importance of the claimed invention in the context of
the accused product, and not just the importance, in general,
of features of the same type as the claimed invention."
Genband, 211 F.Supp.3d at 894. The district court
then noted Genband's arguments that certain
stringency-reducing explanations of "drive demand"
are found in both Apple III, 735 F.3d at 1365 and
Apple, Inc. v. Samsung Electronics Co. (Apple
IV), 809 F.3d 633, 641-42 (Fed. Cir. 2015), cert.
denied, 136 S.Ct. 2522 (2016), petition for cert.
filed, 85 U.S.L.W. 3460 (U.S. Mar. 10, 2017) (No.
16-1102). But the court did not indicate agreement with
Genband that those explanations state the governing law.
Genband, 211 F.Supp.3d at 894.
court then applied its articulated legal standard as follows:
During the bench trial, Genband presented the following
regarding the causal nexus, which falls into three general
categories: (1) a self-generated "win-loss" report;
(2) demonstratives purporting to correlate dates of
Metaswitch press releases with an alleged decline in
Genband's market share; and (3) statements from