This month, the Federal Circuit issued its opinion in Koninklijke Philips N.V. v. Thales USA, Inc., a patent case we have been watching because it attracted amicus briefs. In this case, Thales appealed a district court’s denial of a motion for a preliminary injunction. Thales sought to “prevent Philips from pursuing an . . . exclusion order against Thales” at the International Trade Commission based on a commitment by Philips to license its patents on fair, reasonable, and nondiscriminatory terms. In a relatively short precedential opinion, a Federal Circuit panel comprised of Chief Judge Moore and Judges Dyk and Chen affirmed the denial of a preliminary injunction. This is our opinion summary.
Chief Judge Moore authored the court’s opinion. She described the facts of the case:
Philips and Thales design and manufacture telecommunications equipment and related technologies, including those related to various generations of wireless networks. Philips and Thales have been engaged in negotiations over what Philips asserts are standard essential patents (SEPs) that Thales has implemented according to European Telecommunications Standards Institute (ETSI) specifications. After negotiations did not yield an agreed-upon fair, reasonable, and nondiscriminatory (FRAND) license for the SEPs, Philips filed an infringement and declaratory action against Thales in the District of Delaware and an ITC action seeking an exclusion order. Thales filed a breach of contract counterclaim and declaratory counterclaim for a FRAND rate determination, and it moved for a preliminary injunction barring Philips from pursuing its ITC action. The district court denied Thales’ motion. Thales appeals.
Chief Judge Moore began the Federal Circuit’s analysis by stating that a party seeking a preliminary injunction “must establish that it is likely to suffer irreparable harm without an injunction” and that “mere possibility or speculation” is not sufficient. She explained that Thales provided evidence of only speculative harms, “such as customers merely expressing concern that a potential future ITC exclusion order could affect Thales’ ability to deliver products down the road.” The Federal Circuit determined that this evidence is “insufficient to show a likelihood of irreparable harm.”
Next, the Federal Circuit said that Thales did not provide any evidence that it lost customers, had customers delay purchases, or had difficulty acquiring new business. The court went on to say that the speculative harm Thales proved “does not justify the rare and extraordinary relief of a preliminary injunction.”
In sum, the Federal Circuit decided that “the district court did not clearly err in finding that there was no evidence of likely irreparable harm and thus did not abuse its discretion in holding that Thales was not entitled to a preliminary injunction.” As a result, it held that “the district court did not abuse its discretion in denying Thales’ motion for a preliminary injunction.”