Federal Circuit Remands For Further Consideration of Proper Irreparable Harm Test for Permanent Injunction

In Genband US v. Metaswitch Networks, No 2017-1148 (Fed. Cir. July 10, 2017), the Federal Circuit clarified that a patentee only need show “some connection” between the patent and sales of infringing products to meet the irreparable harm requirement for a permanent injunction.

The Eastern District of Texas granted an $8.1 million jury verdict to Genband for patent infringement, for patents related to internet voice-communication services, but refused to also grant a permanent injunction, finding that Genband failed to satisfy the showing of irreparable harm by failing to identify a causal nexus showing that “the patented features drive demand for the [infringing] product.”  

One standard applied by the district court, and under review, required that “the patented features drive the demand for the products,” known as the “drive-demand formula.” The Court opined that the district court’s causal nexus standard may have “relied on too stringent an interpretation of the requirement.” The Court examined the evolution of its “causal nexus” test finding a later opinion clarified that the patented features need only be “‘a driver’ as opposed to ‘the driver’” of demand for the infringing products. As the Court could not discern whether the standard applied by the district court applied with current governing approach, it determined a remand necessary.