Processing All Things Federal Circuit
July 19, 2022 - Last Week in the Federal Circuit

Last Week In The Federal Circuit (July 11-15): The FRAND vs. ITC Fight That Wasn’t

Boxing Gloves

Precedential opinions: 3

Non-precedential opinions: 4

Rule 36: 1

Longest pending case from argument: Lanclos v. United States, No. 21-1750 (219 days)

Shortest (non-Rule 36) pending case from argument: Koninklijke Philips N.V. v. Thales USA, Inc., No. 21-2106 (36 days)

Case of the week: Koninklijke Philips N.V. v. Thales USA Inc., No. 21-2106

Panel: Chief Judge Moore and Judges Dyk and Chen, with Chief Judge Moore authoring

You should read this case if: you have a case involving irreparable harm

Sometimes what’s not addressed can be more interesting than what’s actually decided. For some observers that might be so in last week’s case of the week. On its face, the case might have been set to address the intersection of several interesting issues—when a district court can enjoin a party from seeking relief in the ITC; and whether an ITC exclusion order can or should be based on standard essential patents for which fair, reasonable, and nondiscriminatory (FRAND) license litigation is ongoing. But when a district court decision rests on multiple grounds, the Court often will take the cleanest path to affirmance—if there is one. And in the three-and-a-half page precedential opinion the Court issued last week, there clearly was.

The case arose when a patent owner with several standard essential patents filed a district court infringement action and a separate ITC action seeking an exclusion order against an accused infringer (Thales). Thales counterclaimed in the district court for breach of contract and a FRAND determination, and it also asked the district court to preliminarily enjoin the patent owner from pursuing its ITC action. The district court denied the preliminary injunction for failure to show likelihood of success and irreparable harm, among other issues.

On appeal, the parties seemed to set the case up as a showdown on standard essential patents with FRAND obligations and the effect of the possibility of an ITC exclusion order. Amici on both sides weighed in on the issue. But in the end, the Federal Circuit held that Thales’s appeal faltered for a different reason—Thales could not show that the district court clearly erred in its irreparable harm determination. 

In that regard, the Court’s short precedential decision reiterates that concrete evidence of actual, imminent irreparable harm is required: “[t]he mere possibility or speculation of harm is insufficient.” The Court saw no error in the district court’s conclusion that such speculation was all Thales had. Although Thales pointed to customer concerns about Thales’s ability to provide products “down the road” because of the possibility of an ITC exclusion order, that evidence failed to show a “likelihood of irreparable harm.” And the Court noted Thales’s failure to show “any evidence that it lost customers, had customers delay purchases, or struggled to acquire new business because of the ongoing ITC proceedings.”

As for all those FRAND and ITC exclusion order issues, well that’s left for another day.