Finding of Bad Faith Requirement Necessary to Enjoin Patentee’s Ability to Make Allegations of Patent Infringement

In Myco Industries, Inc. v. BlephEx, LLC, No. 2019-2374 (Fed. Cir. Apr. 3, 2020), the Federal Circuit reversed, vacated, and remanded the district court’s grant of a preliminary injunction enjoining BlephEx from making allegations of patent infringement and from threatening Myco’s potential customers with litigation.

BlephEx owns U.S. Patent No. 9,039,718, which relates to an eye treatment using an electromechanical device. Myco alleged that BlephEx made infringement accusations against Myco’s product and to prospective Myco customers during an optometry trade show. Myco then sought declaratory judgment of noninfringement and a preliminary injunction barring BlephEx from “[m]aking false allegations that Myco’s [product] infringes the ’718 patent” and “making baseless threats against Myco’s medical-practitioner potential customers of [Myco’s product].” The district court granted Myco’s motion for a preliminary injunction. BlephEx appealed.

On appeal, the Federal Circuit reversed, vacated, and remanded the district court’s grant of a preliminary injunction, holding that the court must find evidence of bad faith before a patent owner can be enjoined from communicating his patent rights. The Court explained that a bad faith finding must be supported by a finding that the infringement allegations were objectively baseless. The court also found that the district court’s claim construction limiting the claims to “treatment of posterior blepharitis” was incorrect because it was based on a description of BlephEx’s product, not properly applied claim construction principles. Because the district court had not found that BlephEx’s allegations were made in bad faith and applied an incorrect claim construction, the court reversed, vacated, and remanded.