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I-Flow Corp. v. Apex Medical Technologies

January 8, 2010

I-FLOW CORPORATION, A DELAWARE CORPORATION, PLAINTIFF,
v.
APEX MEDICAL TECHNOLOGIES, INC., A CALIFORNIA CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge

AND ALL RELATED COUNTERCLAIMS.

ORDER GRANTING PLAINTIFF'S MOTION FOR PERMANENT INJUNCTION [Docket No. 448]

This case comes before the Court on Plaintiff's motion for permanent injunction. Defendants filed an opposition to the motion. Reply briefs were not permitted. For the reasons set out below, the Court grants the motion.

I. DISCUSSION

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Plaintiff argues these factors weigh in favor of a permanent injunction. Defendants assert Plaintiff's proposed injunction does not satisfy Federal Rule of Civil Procedure 65, and it should not be entered.

A. Irreparable Injury

Plaintiff argues it has suffered irreparable injury in the form of loss of market share, loss of the right to control the terms of its patent license agreements, and loss of its competitive advantage. Defendants do not address these arguments directly, but imply that Plaintiff will not suffer these harms in the future because Defendants have ceased manufacturing the infringing product. However, "[t]his argument is contrary to the law. 'The fact that the defendant has stopped infringing is generally not a reason for denying an injunction against future infringement unless the evidence is very persuasive that further infringement will not take place.'" Mass Engineered Design, Inc. v. Ergotron, Inc., 633 F.Supp.2d 361, 394 (E.D. Tex. 2009) (quoting W.L. Gore & Assoc., Inc. v. Garlock, Inc., 842, F.2d 1275, 1281-82 (Fed. Cir. 1988)). Here, Defendants argue their redesigned products do not infringe, but they have failed to produce persuasive evidence to support that argument. On the contrary, Plaintiff has demonstrated it lost market share, the right to control its patent license agreement, and its competitive advantage as a result of Defendants' conduct. These losses are sufficient to demonstrate irreparable injury, Funai Electric Co., Ltd. v. Daewoo Electronics Corp., 593 F.Supp.2d 1088, 1111 (N.D. Cal. 2009), and thus this factor weighs in favor of an injunction.

B. Adequacy of Legal Remedies

The second factor asks whether legal remedies are adequate to compensate for the plaintiff's injuries. Plaintiff here asserts they are not because of the nature of the injuries. Specifically, Plaintiff argues it would be difficult to calculate its future losses, the harm to its reputation and the loss of its position as the sole provider of soft shell pain pumps. However, Plaintiff's future losses as a result of the Solace pump should be non-existent since Defendants have discontinued the manufacture, distribution and sale of that product. Furthermore, it is unclear how Plaintiff's reputation has been harmed by Defendants' conduct, especially in light of the jury verdict. Plaintiff asserts Defendants' products and customer service are inferior to its products and service, which "may reflect poorly on the market's perception of the overall value of I-Flow's patented and trade secret-protected technology," (Mem. of P. & A. in Supp. of Mot. at 9), but that logic is unsound. Defendants' products and services are a reflection of Defendants, not Plaintiff. Nevertheless, the injury to Plaintiff's position in the soft shell pain pump market is difficult, if not impossible, to quantify. As Plaintiff points out, it made a strategic decision not to license the patented technology at issue in this case to anyone, thereby establishing its position as the market leader. By virtue of Plaintiff's dealings with Defendants, Plaintiff lost its status as the sole provider of soft shell pain pumps. That is an injury from which Plaintiff is unlikely to recover, and is one that is not amenable to a legal remedy. Accordingly, this factor weighs in favor of an injunction.

C. Balance of Hardships

The third factor requires the Court to balance the hardships between the plaintiff and the defendant. Plaintiff argues that balance weighs in its favor because the On-Q pump is its flagship product while the Solace pump constitutes only a small part of Defendants' business. However, the importance of the products to the respective parties does not demonstrate that Plaintiff will be harmed if an injunction does not issue. As mentioned above, Defendants have already discontinued the manufacture, distribution and sale of the infringing Solace pump. Thus, any benefit that Plaintiff would receive from an injunction has already been realized. Although Defendants may not suffer any hardship if an injunction is imposed because they have already discontinued the infringing Solace pump, that does not mean the balance of hardships favors Plaintiff. Rather, it appears neither side will suffer any hardship if an injunction is, or is not, issued. Accordingly, this factor is neutral.

D. Public Interest

The fourth and final factor requires the plaintiff to show that the public interest would be served by a permanent injunction. Here, Plaintiff identifies three public interests that would be served by an injunction: The interest in maintaining a strong patent system, the interest in fair and healthy competition, and the interest in discouraging future wrongdoing. The Court agrees with Plaintiff that these interests ...


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