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Finding of bad faith is required to enjoin patentee from making infringement accusations

Finding of bad faith is required to enjoin patentee from making infringement accusations

Myco v. BlephEx was decided on April 3, 2020 on appeal from the Eastern District of Michigan. Declaratory plaintiff Myco filed an action against declaratory defendant BlephEx, seeking a declaration of no infringement and that the claims of BlephEx’s patent are invalid, and for injunctive and monetary relief. The district court granted Myco’s motion for a preliminary injunction, enjoining BlephEx “from making allegations of patent infringement and from threatening litigation against Myco’s potential customers.” BlephEx appealed.

The Federal Circuit reversed and vacated the preliminary injunction, and remanded.

“[W]hen a preliminary injunction prevents a patentee from communicating its patent rights, a court applies federal patent law and precedent relating to the giving of notice of patent rights.” “[F]ederal law requires a showing of bad faith before a patentee can be enjoined from communicating his patent rights.” “A showing of bad faith must be supported by a finding that the claims asserted were objectively baseless. An asserted claim is objectively baseless if no reasonable litigant could realistically expect success on the merits.”

“The district court abused its discretion when it granted a preliminary injunction enjoining patentee speech without a finding of bad faith.” “[C]ommunication to possible infringers concerning patent rights is not improper if the patent holder has a good faith belief in the accuracy of the communication.” “To the extent the [district] court made any factual findings relevant to bad faith, …the court expressly declined to find that any of BlephEx’s statements were either false or misleading.”

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The record does not support a finding of implied bad faith. 35 U.S.C. § 287(c) does not mean that allegations of infringement directed to medical practitioners are made in bad faith. “The plain text of [section 287(c)] does not state that a medical practitioner is immune from infringement, as the district court found and Myco urges. Rather, the text establishes that, if a medical practitioner’s performance of a medical activity infringes a patent claim, the patentee cannot seek a remedy for such infringement against the practitioner or related health care entity.” “The act provides immunity to certain infringers, but it does not render them non-infringers.” “Accordingly, Myco cannot simply… argue that any alleged statements regarding medical practitioner infringement were made in bad faith. Rather, Myco must establish that BlephEx’s patent infringement statements, whether made generally or to medical practitioners, were objectively baseless.”

“Because the record lacks any evidence that BlephEx …threatened Myco’s potential customers with infringement of the [relevant patent], more specifically, with litigation relating thereto, Myco’s implied bad faith argument fails.”

The district court erred in its finding that Myco was likely to succeed on its non-infringement claims because the finding was based on an erroneous claim construction. Accordingly, the Federal Circuit vacated “the court’s preliminary injunction with respect to BlephEx’s ability to make generalized allegations of infringement with respect to the [relevant] patent.”