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IP Intelligence Report

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In a closely watched patent dispute in the Eastern District of Texas, the USPTO and DOJ’s Antitrust Division took the unusual step of weighing in on how courts should evaluate a request for injunctive relief by a patent owner that does not practice the invention. That choice of forum was no accident. The case was before Judge Rodney Gilstrap, who oversees more patent cases than any other judge in the country, making his courtroom one of the most important venues for any effort to influence patent remedies. The government’s interpretation gained real traction: Judge Gilstrap accepted the central points that non-practicing patent owners are not categorically barred from proving irreparable harm and that money damages may not always adequately address ongoing infringement. But the court still denied the injunction. The result is a split decision: The government’s view of the first two eBay factors advanced, while the court made clear that injunctive relief still requires a complete, case-specific showing on all four eBay factors.

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The case is Collision Communications, Inc. v. Samsung Electronics Co., Ltd. A jury found infringement, no invalidity, and willfulness, awarding more than $445 million in damages. That award was for past infringement and calculated as a reasonable royalty.

After judgment, Collision sought a permanent injunction on one asserted patent. The U.S. government, through the USPTO and DOJ’s Antitrust Division, filed a Statement of Interest addressing how courts should evaluate irreparable harm and adequacy of monetary damages when the patent owner does not practice the invention. The government argued that nonpracticing patent owners can suffer irreparable harm, particularly because patents are unique assets and future infringement can be difficult to value. The government also emphasized that monetary damages may be inadequate where courts must speculate about future markets, competitors, applications and economic conditions.

The government filed in support of neither party and did not take a position on whether the court should grant an injunction on the evidence before it.

This was not just another amicus-style filing. It was a targeted effort by the USPTO and DOJ to influence how courts interpret the equitable factors governing patent injunctions in a forum where those rulings can have significant practical effect. Judge Gilstrap’s docket gives his injunction rulings significance beyond the parties before him.

The Government’s Interpretation Gets Traction

Judge Gilstrap accepted the government’s core premise. He rejected the suggestion that Collision’s licensing-based business model made injunctive relief unavailable. The court emphasized that there are not “two classes” of patent owners and that non-practicing entities hold the same patent rights as practicing entities.

The order is especially notable on this point. Judge Gilstrap explained that a patent owner’s decision not to practice the patent does not diminish the rights conferred by the patent. He put it memorably: “The USPTO does not issue patents with a gold seal if the holder practices the patents, but issues patents with only a silver seal when they do not.”

Judge Gilstrap also credited the practical concern at the heart of the government’s brief. Patent valuation can be difficult and future infringement can be hard to price with confidence. That uncertainty supported the court’s conclusion that Collision had shown both irreparable harm and inadequacy of monetary damages.

But the Second Half of eBay Still Matters

Collision satisfied the first half of eBay, but not the second. Although Judge Gilstrap found irreparable harm and inadequacy of monetary damages, Collision still had to show that the balance of hardships favored an injunction and that the public interest would not be disserved. The court found that Collision had not made that showing.

On the balance of hardships, Judge Gilstrap found that Collision did not identify any particular hardship it would face if an injunction were denied. Nor was it enough for Collision to say that its proposed injunction was narrowly tailored. On public interest, he held that Collision relied too heavily on the general proposition that enforcing patent rights serves the public, rather than showing why an injunction would not disserve the public on the specific facts before the court.

As a result, Judge Gilstrap ruled that even a successful showing on the first two eBay factors could not overcome Collision’s failure to prove the last two.

Beyond Collision: The Injunction Road Map

Judge Gilstrap’s courtroom remains one of the most important patent venues in the country. A ruling from Marshall therefore carries weight beyond this dispute.

That context makes the ruling especially useful for future litigants. The government did not ask the court to grant Collision an injunction, and the court did not do so. But the opinion gives future patent owners language they are likely to cite. Non-practicing patent owners are not second-class patent owners, and uncertainty in valuing future infringement can support findings of irreparable harm and inadequacy of monetary damages.

The decision also may not be the final word. Collision could seek Federal Circuit review, giving the appellate court an opportunity to address how far courts may go in recognizing irreparable harm for non-practicing patent owners.

For future litigants, Judge Gilstrap’s opinion provides a useful road map. A patent owner that does not practice the invention may be able to prove irreparable harm and inadequacy of monetary damages. But to obtain a permanent injunction, it will need a concrete record on the balance of hardships and public interest. That is where Collision fell short, and where the next patent owner seeking an injunction will need to build the record.

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