MACOM Tech. v. Infineon was decided on January 29, 2018 on appeal from the Central District of California. The parties entered into an agreement that allowed plaintiff MACOM and defendant Infineon to share rights to practice licensed patents within a general “Field of Use.” The agreement further defined an “Exclusive Field” within the general Field of Use in which MACOM had certain exclusive rights to practice the licensed patents, even as against Infineon. Infineon terminated the agreement, claiming material breach. MACOM obtained a preliminary injunction against Infineon, declaring that Infineon’s termination of an agreement was ineffective and ordering Infineon to comply with that agreement. Infineon appealed.
The Federal Circuit affirmed the entry of the injunction, vacated part of the injunction, and remanded.
The district court did not err in finding that MACOM showed a likelihood of success on the merits of its Wrongful Termination claim based on the implied covenant of good faith and fair dealing.
The district court did not err in finding that MACOM was likely to suffer irreparable harm in the absence of a preliminary injunction. The district court partly relied on evidence that MACOM was being harmed by Infineon’s marketing of its product potentially practicing the patent within MACOM’s Exclusive Field. The district court also relied on the observation that MACOM would lose its exclusive license to practice the licensed patents in the Exclusive Field if the agreement’s termination was effective. Relying on MACOM employee testimony, the district court “agreed that MACOM would suffer harm merely by virtue of its customers’ perception that it no longer holds an exclusive license.” It would be difficult for MACOM, as a new entrant in the market, to compete with incumbent Infineon for the business of these very few, “highly risk-averse” customers “without a unique value proposition—namely, the exclusivity that the Agreement provides.” Such harm would occur even if Infineon is not actually “practicing a patent within MACOM’s exclusive use,” i.e., if Infineon’s marketed product didn’t infringe the patent but was instead a design around. There was thus a sufficient causal nexus between Infineon’s termination of the Agreement and the identified harm to MACOM, despite that MACOM did not actually show that the marketed product practiced the licensed patents. The district court did not abuse its discretion.
The Federal Circuit vacated the first sentence of the third paragraph of the injunction because it “lack[ed] the specificity that Rule 65(d) requires.” Injunctions “simply prohibiting future infringement of a patent do not meet the specificity requirements of Rule 65(d). Rather, to comply with Rule 65(d) the enjoined acts must relate to particular, adjudicated infringing products.” The first sentence “enjoin[ed] Infineon from, among other activities, designing, developing, making, using, marketing, selling, and offering to sell products in the Exclusive Field that practice the Licensed Patents.” This, in essence, prohibited infringing acts, but “without reference to any particular, adjudicated infringing products.”
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The Federal Circuit further rulings on the provisions of the injunction, but they were not as important to patent remedies law.
Macom Tech. Sols. Holdings, Inc. v. Infineon Techs. AG, 881 F.3d 1323, 1326 (Fed. Cir. 2018)