Indiana Law Review The Impact of the Creation of the Court of Appeals for the Federal Circuit on the Availability of Preliminary Injunctive Relief Against Patent Infringement The Court of Appeals for the Federal Circuit (CAFC) lowered the threshold standards required for the acquisition of preliminary injunctions against patent infringement.' The opinions of the CAFC reflect a belief that a strong patent system will encourage investment in research and development, that this investment is required to promote the reindus- trialization of the United States, and that strengthening the system requires an increased availability of injunctions against infringement. However, since the creation of the CAFC, investment in technology has slowed.^ The CAFC has been quick to preliminarily enjoin defendants from continuing activities aimed at developing technologies patented by others without first completing the comprehensive determinations of validity and infringement that would occur during a trial. This tendency of the court to "shoot first and ask questions later" creates a hardship for business. Furthermore, rather than supporting research and devel- opment efforts, this tendency has discouraged investment in the devel- opment of the technologies involved. This Note contains the results of a study of patent cases, both at the district court level and at the appellate level, that have addressed 1. H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387 (Fed. Cir. 1987) ("The standards applied to the grant of a preliminary injunction are no more nor less stringent in patent cases than in other areas of the law."); Atlas Powder Co. v. Ireco Chemicals, 773 F.2d 1230, 1233 (Fed. Cir. 1985): The burden upon the movant should be no different in a patent case than for other kinds of intellectual property, where, generally, only a "clear showing" is required. Requiring a "final adjudication," "full trial," or proof "beyond question" would support the issuance of a permanent injunction and nothing would remain to estabUsh the liability of the accused infringer. That is not the situation before us. We are dealing with a provisional remedy which provides equitable preliminary relief. Id. (Emphasis in the original); In re Certain Fluidized Supporting Apparatus & Components Thereof, 225 U.S.P.Q. 1211, 1213 n.7 (U.S.I.T.C. 1984) ("[Tjhe CAFC has moved patent cases from their peculiar position toward the mainstream of the jurisprudence of preliminary injunctions."). See also Foster, The Preliminary Injunction - A "New" and Potent Weapon in Patent Litigation, 68 J. Pat. & Trademark Off. Soc'y 281 (1986); Metcalf, Preliminary Injunctions and their Availability: How to Defend Against the Early Injunction, 15 AIPLA Q.J. 104 (1987). But cf. Schwartz, Injunctive Relief in Patent Cases, 50 Alb. L. Rev. 565 (1986) (noting the "misconception" that injunctions are granted more now than they were in the past in patent cases). 2. Clark and Malabre, Eroding R & D: Slow Rise in Outlays for Research Imperils U.S. Competitive Edge, Wall St. J., Nov. 16, 1988, at Al, col. 6. 169 170 INDIANA LAW REVIEW [Vol. 23:169 motions for preliminary injunctions against patent infringement. The study shows that the success rate of these motions has been 52% since the creation of the CAFC, a rate that is statistically significantly different from the 36% success rate of the preceding twenty-nine years. This Note will review the requirements for obtaining preliminary injunctions within the framework of the patent law, it will present and statistically analyze the CAFC's performance with respect to preliminary injunctions against infringement, and it will present an analysis of the written opinions of CAFC to provide insight into the apphcation of the law of preHminary injunctions to patent infringement actions by CAFC. I. The Patent Law American patent law evolved from the English Statute of Monopolies^ of 1623. Section VI of this anti-monopoly statute provided an exception for letters patents and grants of privilege of the sole working or making of any new manufactures within this realm, to the true and first inventor or inventors, of such manufactures, so as also they be not contrary to the law, nor mischievous to the state by raising prices of commodities at home or hurt of trade, or generally inconvenient."* The drafters of the Statute of Monopolies recognized that establishing patent protection created a delicate statutory balance between encouraging technical innovation and creativity and restricting the competitive process.^ The United States Constitution, which grants Congress the power "[t]o promote the progress of science and useful arts, by securing for Hmited times to authors and inventors the exclusive right to their re- 3. The Statute of Monopolies, 21 Jac. 1, ch. 3 (1623-4). 4. L. Wood, Patents and Antitrust Law 9 n.39 (1942). The Statute of Mo- nopolies codified the existing common law, adding little to the law. Id. at 1-11. "[T]he first famous legal expression of the right of every subject to freedom of trade relieved of the restraint of patent monopoly" was Darcy v. Allein, 11 Coke 84 B. 77 Eng. Rep. 1260 (K.B. 1602), 1 Abbot Patent Cases 1, better known as the Case of Monopolies. Id. at 8, n.34 and accompanying text. 5. L. ScHw^ARTZ, J. Flynn & H. First, Free Enterprise and Economic Or- ganization: Antitrust 936, (6th ed. 1983): The Statute of Monopolies provided for letters patent to the "true and first inventor" so long as the patent "be not contrary to the law, nor mischievous to the state, by raising prices of commodities at home, or hurt of trade, or generally inconvenient." Thus the statute recognized the tension between patents as reward for invention and patents as restriction on the competitive process. Id. (quoting from the Statute of Monopolies, 21 Jac. 1, ch. 3 (1623-4)). 1990] PATENT INFRINGEMENT 171 spective writings and discoveries "authorizes patent protection."^ A pat- ent provides the holder with the right "to exclude others from making, using or selling" the patented invention in the United States for seventeen years. ^ To obtain a patent, an inventor must file an application describing the invention with the Patent and Trademark Office (PTO).^ A patent examiner determines whether the invention is entitled to patent pro- tection.^ The inventor receives a patent if the examiner concludes that the invention is entitled to patent protection.'^ The inventor whose application is rejected by the examiner may amend the application and request that the PTO examine it again." The dissatisfied applicant may appeal to the Board of Appeals of the PTO, which may reverse the decision of the examiner.'^ If the Board does not reverse the examiner's decision, the applicant may either appeal to the Court of Appeals for the Federal Circuit, or the applicant may bring a civil action in the District Court for the District of Columbia against the Commissioner of Patents seeking issuance of the patent.'^ Processing a patent application is a lengthy procedure requiring about two years to complete."* About 60% of the apphcations submitted to the PTO are approved.'^ Roughly 0.2% of issued patents have their validity attacked in litigation, and between 50% and 60% of these patents are found to be invalid.'^ II. Preliminary Injunctions A preliminary injunction is "issued to protect plaintiff from irrep- arable injury and to preserve the court's power to render a meaningful 6. U.S. Const, art. I, § 8, cl. 8. 7. 35 U.S.C. § 154 (1982). 8. 35 U.S.C. §§ 111-22 (1982). 9. 35 U.S.C. §§ 101-04 (1982). 10. 35 U.S.C. § 131 (1982). 11. 35 U.S.C. § 132 (1982). 12. 35 U.S.C. § 134 (1982). 13. 35 U.S.C. §§ 141-45 (1982); 28 U.S.C. §§ 1295 (a)(4)(A), 1254 (1982). 14. In 1987 the PTO required, on the average, approximately 22 months to process an application. 1989 OMB Budget of the United States Government app. at I-F20. It has been estimated that between 6 months and 4 years are required to process an application, depending on its complexity. Schellin, The Innovating Process, 8 AIPLA Q.J. 155, 168 (1980). 15. 1989 OMB Budget of the United States Government app. at I-F20. The PTO's annual report indicated that in 1986 and 1987 62% and 63'^o of the applications resulted in issued patents; the report estimated 65% for 1988 and 1989. Id. See also Adams, The Court of Appeals for the Federal Circuit: More than a National Patent Court, 49 Mo. L. Rev. 43, 52 (1984); Koenig, Patent Invalidity: A Statistical and Substantive Analysis, 3-14 to -15 & n.6 and 4-4 to -5 (1980). 16. Adams, supra note 15, at 54. 172 INDIANA LAW REVIEW [Vol. 23:169 decision after a trial on the merits. "^^ Rule 65 of the Federal Rules of Civil Procedure authorizes federal courts to grant motions for preliminary injunctions.^^ The Rules are silent as to the conditions or circumstances that must be met to justify the grant of such motions. This determination is left to the discretion of the trial court^^ and has resulted in a fragmented and specialized common law.^^ A, Preliminary Injunctions Generally A preliminary injunction issued before a trial on the merits is an extraordinary remedy that carries the risk of imposing an unwarranted burden on a defendant. ^^ Rule 65 (a)(2) requires that a hearing be held before a preUminary injunction may be issued. ^^ 17. 11 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2947, at 423 (1973 & Supp. 1988) [hereinafter Wright & Miller]. 18. Fed R. Civ. P. 65. Sub-sections (a) and (d) state: (a) Preliminary injunction. (1) Notice. No preliminary injunction shall be issued without notice to the adverse party. (2) Consolidation of hearing with trial on merits. Before or after the commencement of the hearing of an application for a preliminary injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application. Even when this consolidation is not ordered, any evidence received upon an application for a preliminary injunction which would be admissible upon the trial on the merits becomes part of the record on the trial and need not be repeated upon the trial. This subdivision (a)(2) shall be so construed and applied as to save to the parties any rights they may have to trial by jury. (d) Form and scope of injunction or restraining order. Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation in them who receive actual notice of the order by personal service or otherwise. Fed R. Crv. P. 65. The comments that accompany this rule are silent as to these sections. There is no indication as to the circumstances under which a preliminary injunction is appropriate. 19. 35 U.S.C. § 283 ("The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable."). See generally Wright & Miller, supra note 17. 20. See Leubsdorf, The Standard for Preliminary Injunctions, 91 Harv. L. Rev. 525, 525 (1978). 21. Wright & Miller, supra note 17, at 424. 22. Fed. R. Civ. P. 65(a). 1990] PATENT INFRINGEMENT 173 Although a preliminary injunction is a form of interlocutory relief, Congress found that the safeguard of immediate appellate review of these decisions was required to reduce the risk of potentially harsh consequences stemming from the grant of an injunction prior to a trial on the merits.^^ The standard for appellate review of decisions on motions for preHminary injunctive relief is whether the trial court has abused its discretion. 2^ It may also need to be determined on appeal whether the trial court committed an error of law, and the trial court*s underlying findings of fact are subject to the clearly erroneous standard of Rule 52(a)." The formulations for deciding whether to grant a preliminary in- junction vary from circuit to circuit. ^^ The most commonly evaluated factors include (1) the threat of irreparable harm to the plaintiff if the injunction is not granted, (2) the balance between the potential harm to the plaintiff if the injunction is not granted and the potential harm to the defendant if the injunction is granted, (3) the pubHc interest, and (4) the UkeHhood that the plaintiff will prevail at the trial on the merits.^'' The threat of irreparable harm carries more weight than the other factors.^* The movant must show that harm will occur before a trial 23. See 28 U.S.C. § 1292 (a)(1) (1982). The 1982 enactment of the Federal Courts Improvement Act (FICA) granted exclusive jurisdiction to the Court of Appeals for the Federal Circuit in patent infringement actions. Pub. L. No. 97-164, § 125, 96 Stat. 36 (codified at 28 U.S.C. §§ 1292 (c)(l)(1982), 1295 (1982)). Wright & Miller noted that "[A] preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Wright & Miller, supra note 17, at 428-29. Moore added that: An injunction is a powerful and generally effective remedy. This is due in large measure to the court's power to punish disobedience by civil contempt, which is remedial in nature and designed to coerce obedience and to compensate the complainant for losses sustained; and, in a proper case, by criminal contempt whose purpose is to vindicate the court's authority and dignity. 7 J. MooRE, J. Lucas & K. Sinclair, Jr., Moore's Federal Practice § 65.02[3] at 65- 19 (2d ed. 1989). 24. Smith Int'l., Inc. v. Hughes Tool Co., 718 F.2d 1573, 1579 (Fed. Cir. 1983) ("[T]he scope of review of a district court's decision involving the denial of an injunction is narrow. One denied a preliminary injunction must meet the heavy burden of showing that the district court abused its discretion, committed an error of law, or seriously misjudged the evidence."). See generally J. Moore, supra note 23, at 65-70 to 65-77. 25. Fed. R. Civ. P. 52(a). See Eli Lilly & Co. v. Premo Pharm. Labs., Inc., 630 F.2d 120, 136 (3rd. Cir. 1980) ("[W]e must affirm the order of the district court unless the court abused its discretion, committed an error of law, or seriously misjudged the evidence."); see also J. Moore, supra note 23, at 65-78. 26. See Leubsdorf, supra note 20, at 525-26; J. Moore, supra note 23, at 65-32 to 65-54 (providing a detailed analysis by circuit). 27. E.g., American Can Co. v. Mansukhami, 742 F.2d 314, 325 (7th Cir. 1984). 28. Wright & Miller, supra note 17, at 431 and 436-37. 174 INDIANA LAW REVIEW [Vol. 23:169 on the merits can be completed. ^^ The movant must also show that there is no adequate alternate remedy at law.^^ Speculative injury and economic loss are normally not sufficiently harmful for a court to find irreparable harm,^* though economic losses that threaten to end a movant's business may satisfy this requirement.^^ The analysis of the balance between the potential harm to the plaintiff if the injunction does not issue and the potential harm to the defendant if the injunction does issue requires the consideration of: (1) whether the grant of the preliminary injunction would provide the plaintiff with all or most of the relief that plaintiff would be entitled to if successful after a trial on the merits," and (2) whether the defendant is being ordered to affirmatively act.^'* The presence of either of these factors weighs against the issuance of preHminary relief.^^ The purpose of a 29. Roper Corp. v. Litton Sys., Inc., 757 F.2d 1266, 1273 (Fed. Cir. 1985) (The court did not grant the injunction, stating, "[T]here is nothing in the record estabUshing ... an immediate threat. . . . Thus, the status quo is maintained without injunctive relief pendente lite.'') (emphasis in original). 30. Lametti & Sons, Inc. v. City of Davenport, Iowa, 432 F. Supp. 713, 1714-15 (S.D. Iowa 1975) (if contractor could demonstrate the city's improper acceptance of another bid, it would have an adequate remedy at law, and therefore could not enjoin the city from accepting the allegedly improper bid). 31. As to speculative injury, see Roper, 757 F.2d at 1273 (Roper has demonstrated mere apprehension of potential future infringement, primarily from the possibility of Litton's sale of its oven technology to a company that might infringe. Without more, such fears cannot justify the issuance of preUminary equitable relief.); Chemical Eng'g Corp. V. Mario, Inc., 754 F.2d 331, 334 (Fed. Cir. 1984) ("No authority anywhere supports the notion that a preliminary injunction against infringement may issue in response to rumors of a threat of infringement."). For cases stating that economic loss is normally not sufficient to preliminarily enjoin a party, see Lametti & Sons, Inc. v. City of Davenport, Iowa, 432 F. Supp. 713, (D.C. Iowa 1975) (contractor was denied a preliminary injunction enjoining the city from accepting an allegedly improper bid because it could recover the cost of the preparation of its bid if successful on the merits); A.L.K. Corp. v. Columbia Pictures Indus., Inc., 440 F.2d 761 (3d Cir. 1971) (a theatre owner was denied a preliminary injunction when he sued a film distributor for performance of a contract to provide first run movies because the court found that its potential losses were readily measurable). 32. Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1205, (2d Cir. 1970) ("[T]he right to continue a business ... is not measurable entirely in monetary terms. . . ."); but cf. Tele-Controls, Inc. v. Ford Indus., Inc., 388 F.2d 48, (7th Cir. 1967) (the fact that plaintiff included lost dollar amounts in the complaint demonstrated that the loss of plaintiff's dealership could be compensated with damages and that equitable relief was not required). 33. Knapp v. Walden, 367 F. Supp. 385, 388 (S.D.N.Y. 1973); Bailey v. Romney, 359 F. Supp. 596, 600 (D.D.C. 1972) (the burden on the plaintiff to show the likelihood of success on the merits increases as the preliminary relief sought begins to resemble the relief expected after a trial on the merits). 34. Wetzel v. Edwards, 635 F.2d 283, 286 (4th Cir. 1980). 35. Bricklayers, Masons, Marble and Tile Setters, Protective and Benevolent Union 1990] PATENT INFRINGEMENT 175 preliminary injunction is to maintain the status quo and to protect the court's ability to render a meaningful decision for either party. ^^ Courts have been reluctant to force parties to act to protect the court's ability to render a meaningful decision when this action would disrupt the status quo?^ The CAFC warned that status quo does not mean "the last un- contested status which preceded the pending controversy."^* A state of affairs that permits the alleged injury to continue at its present rate, requiring only that this rate is not exceeded, is not maintaining the status quo. The CAFC held that maintaining the status quo would require that the trespasses stop ''cold turkey. "^^ A court will consider the pubhc interest when faced with a motion for preliminary injunctive rehef. This allows it to address policy issues that bear on whether the motion should be granted. "^^ The public interest may be defined in a statute,"^' and the importance of this factor will grow when government policy or regulations are brought into issue. "^^ The likelihood that a movant will succeed on the merits is considered because the propriety of issuing a preliminary injunction is based on the validity of the movant's claim. "^^ In most jurisdictions the movant must demonstrate a reasonable probability of success.'^ The degree of Hkehhood of success is not dispositive of the motion. It must be balanced with the comparative injuries of the parties, creating a shding scale for the importance of this factor based on the injunction's potential impact and the need for the injunction."*^ No. 7 of Neb. v. Luedeg Const. Co., 346 F. Supp. 558, 561 (D. Neb. 1972). See generally Wright & Miller, supra note 17, at 329-48. 36. Atlas Powder Co. v. Ireco Chem, 773 F. 2d 1230, 1232 (Fed. Cir. 1985) ("[A] preliminary injunction preserves the status quo if it prevents future trespasses but does not undertake to assess the pecuniary or other consequences of past trespasses."). 37. La Chemise Lacoste v. General Mills, Inc., 487 F.2d 312 (3d Cir. 1973). 38. Atlas, 773 F.2d at 1231. 39. Id. at 1232. 40. In re Uranium Antitrust Litig, 617 F.2d 1248 (7th Cir. 1980) (enjoining de- fendants in a price fixing case from removing their assets from the United States supported the public interest in having effective antitrust laws). 41. United States v. Nutrition Serv., Inc., 227 F. Supp. 375 (W.D. Pa. 1965). The Food, Drug, and Cosmetic Act defined the public interest. 42. Spiegel v. City of Houston, 636 F.2d 997, 1002 (5th Cir. 1981) (all requirements for a preliminary injunction were met, but the injunction against certain police methods was denied because it would have hindered good faith law enforcement, there by disserving the public interest). 43. Delaware & Hudson Ry. Co. v. United Transp. Union, 450 F.2d 603, 619 (D.C. Cir. 1971) (The weighing of the factors that determine the outcome of a motion for preliminary injunctive relief "depend on underlying premises as to the substantive law defining legal rights."). 44. Wright & Miller, supra note 17, at 329-48. 45. Hybritech Inc. v. Abbot Labs., 849 F.2d 1446, 1451 (Fed. Cir. 1988). While 176 INDIANA LAW REVIEW [Vol. 23:169 There are rhetorical differences among the jurisdictions with respect to the standards used by each, but these differences do not seem to carry substantive significance."^^ The standard for the exercise of this immense power suffers from inconsistent formulations. Some authorities do no more than list relevant factors - typically the plaintiffs likelihood of success on the merits, the prospect of irreparable harm, the comparative hardship to the parties of granting or denying reUef, and sometimes the impact of the relief on the public interest. Others state combinations of these factors that will warrant relief. Still others lay down a four-fold test, whose folds differ from one formulation to the next. Irreparable injury may or may not be mentioned. Sometimes the injunction must not disserve the public interest, sometimes it must serve the public interest, and sometimes only the equities of the parties count. . . . The dizzying diversity of formulations, unaccompanied by an explanation for choosing one instead of another, strongly suggests that the phrases used by the courts have little impact on the result in particular cases. "^^ The difficulty in gauging the impact of the rhetorical differences between jurisdictions is confounded by additional requirements that must be established for various substantive areas of the law. Historically, additional requirements for acquiring a prehminary injunction under the patent law have made it difficult to acquire preliminary injunctive relief in these cases. B. Preliminary Injunctions Against Patent Infringement A preliminary injunction is a potent weapon for enforcing a patent holder's monopoly. To obtain a prehminary injunction a movant must show the threat of irreparable harm, that the balance of potential harms weighs against him, that permitting the injunction is in the public interest, and that he is likely to succeed on the merits. In a patent infringement discussing the factors that are considered when reviewing a decision to grant or deny a preliminary injunction, the court noted that "[tjhese factors, taken individually, are not dispositive; rather, the district court must weigh and measure each factor against the other factors and against the form, and magnitude of the relief requested." See also Packard Instrument Co. v. ANS, Inc., 416 F.2d 943, 945 (2d Cir. 1969). 46. Leubsdorf, supra note 20. See also Wright & Miller, supra note 17, at 451- 452. For a detailed discussion of the formulations used in each circuit, see Moore, supra note 25, at 65-32 to 65-54, For a general presentation of the relevant factors see Moore, supra note 25, at 65-54 to 65-70. 47. Leubsdorf, supra note 20, at 525-26. 1990] PATENT INFRINGEMENT 177 case, the movant must also show his title in the patent, the validity of the patent, and the infringement of the patent. "^^ The required showing of the movant's likelihood of success on the merits is particularly strong when the claims of infringement are disputed, though often these disputes cannot be properly resolved without a full trial on the merits. "^^ Irreparable harm is presumed in patent cases when the strength of the showing of the Hkehhood of success on the issues of vahdity and infringement is considerable. ^° Also, the analyses of the public interest and the balance of harms normally include the effect that the decision will have on the strength and integrity of the patent system.^' 7. Validity and Infringement.—By statute patents are presumed to be valid." But invahdity may be raised as a defense to a claim of infringement. Traditionally, plaintiffs seeking preliminary injunctions in patent infringement cases were required to establish the elements of validity and infringement beyond question. ^^ The CAFC relaxed this requirement by holding that only a clear showing of validity and in- fringement is necessary. 5"^ 48. Jenn-Air Corp. v. Modern Maid Co., 499 F. Supp. 320, 322 (D. Del. 1980). While the requisite showing on the merits in other types of cases is the probability of success, the party seeking preliminarily to enjoin infringement must demonstrate "beyond question" that the patent is valid, that the patent is infringed and that the party seeking such relief has valid title to the patent. In other respects, the standard for granting a preliminary injunction against infringement in a patent suit is the same as that applicable to other types of cases. Id. at 322 (citations omitted). See also 5 D. CmsuM, Patents, A Treatise on the Law OF Patentability, Validity and Infringement, § 20.04 (1987 & Supp. 1988). 49. D. Chisum, supra note 48, at 20-288 to 20-289. 50. Roper Corp. v. Litton Systems, Inc., 757 F.2d 1266, 1271 (Fed. Cir. 1985) (In order to raise the presumption of irreparable harm, the showing of the likelihood of success on the merits "must be not merely a reasonable but a strong showing indeed."). 51. Atlas Powder Co. V. Ireco Chem., 773 F.2d 1230, 1234 (Fed. Cir. 1985) (no abuse of discretion when the district court determined that possible supply problems for the mining industry, the loss of 66% of Ireco's sales, and layoff of 200 people, all expected to be caused by the grant of the preliminary injunction, were not as important as maintaining Atlas' patent rights). 52. 35 U.S.C. § 282 (1982 & Supp. 1986). 53. Jenn-Air, 499 F. Supp. at 322 ("[Tjhe party seeking preliminarily to enjoin infringement must demonstrate 'beyond question' that the patent is valid, that the patent is infringed, and that the party seeking such relief has valid title to the patent."). See also D. Chisum, supra note 48, at 20-276 to -278. 54. Atlas Powder, 773 F.2d at 1233: The burden upon the movant should be no different in a patent case than for other kinds of intellectual property, where, generally, only a "clear showing" is required. Requiring a "final adjudication," "full trial," or proof "beyond question" would support the issuance of a permanent injunction and nothing 178 INDIANA LAW REVIEW [Vol. 23:169 The statutory presumption of patent validity^^ gained theoretical legitimacy in 1836 with the creation of the Patent Office and an ex- amination procedure. ^^ Still, it has been advanced that "[t]he presumption of validity is too slim a reed to support a preliminary injunction in a patent case."^^ Judge Learned Hand provided two theories to justify being wary of the presumption of a patent's validity. The first is that a patent is not even prima facie valid until a judge, apart from an administrative official, has adjudged its vahdity.-^ The second is that "[e]xaminers have neither the time nor the assistance to exhaust the prior art; nothing is more common in a suit for infringement than to find that all the important references are turned up for the first time by the industry of a defendant whose interest animates his search. "^^ The CAFC has noted that the burden is always on the movant to prove that it deserves injunctive relief, but the burden of proving invalidity is with the party attacking validity.^° 2. Irreparable Harm and the Public Interest.—Irreparable harm must be proven when a preliminary injunction is sought in a patent infringement case, but the circuit courts of appeals were inconsistent in the level of the showing that they required.^^ In response, the CAFC would remain to establish the liability of the accused infringer. That is not the situation before us. We are dealing with a provisional remedy which provides equitable preliminary relief. Thus, when a patentee "clearly shows" that his patent is valid and infringed, a court may, after a balance of all of the competing equities, preliminarily enjoin another from violating the rights secured by the patent. (emphasis in the original) (citations omitted). See also H.H. Robertson, Co. v. United Steel Deck, Inc., 820 F.2d 384, 387 (Fed. Cir. 1987) ("The standards applied to the grant of a preliminary injunction are no more nor less stringent in patent cases than in other areas of the law."). 55. 35 U.S.C. § 282 (1982 and Supp. 1986). See also Radio Corp. of Am. v. Radio Eng'g Lab., Inc., 293 U.S. 1 (1934) ("A patent regularly issued ... is presumed to be vaHd until the presumption has been overcome by convincing evidence of error."). 56. D. Chisum, supra note 48, at 20-270. 57. Mayview Corp. v. Rodstein, 480 F.2d 714, 718 (9th Cir. 1973). See also T. J. Smith and Nephew Ltd. v. ConsoHdated Medical Equip., Inc., 821 F.2d 646, 648 (Fed. Cir. 1987) (presumption of validity "is procedural, not substantive"); H. H. Robertson, 820 F.2d at 388 (Fed. Cir. 1986) ("[T]he burden is always on the movant to demonstrate entitlement to preliminary relief. Such entitlement, however, is determined in the context of the presumptions and burdens that would inhere at trial on the merits,"). 58. Rosenberg v. Groov-Pin Corp., 81 F.2d 46, 47 (2d Cir. 1936). 59. Id. Judge Hand added that "[i]t is a reasonable caution not to tie the hands of a whole art until there is at least the added assurance which comes from such an incentive." Id. 60. H. H. Robertson, 820 F.2d at 387. 61. Compare Nuclear-Chicago Corp. v. Nuclear Data, Inc., 465 F.2d 428, 429 n.l (7th Cir. 1972) ("Proof of irreparable harm is always a requirement for issuance of a 1990] PATENT INFRINGEMENT 179 ruled that if both validity and infringement are "clearly established," irreparable harm is to be presumed. ^^ The CAFC explicitly ruled that to clearly establish validity does not require a prior adjudication of the patent." When considering public policy, the CAFC held that the plaintiff must demonstrate that the granting of the injunction will not disserve the public interest.^ Prior to the CAFC's ruling, the jurisdictions were split between this standard and a more stringent standard requiring that movants show that the injunction would serve the public interest. ^^ The public interest seldom plays a substantial role in the consideration of preliminary injunctions in patent infringement actions, though oc- casionally it is the basis for the decision. In Scripps Clinic and Research Foundation v. Genentech,^ after finding that Genentech infringed Scripps' patent, the court noted that there were two advantages for hemophiUacs from Genentech' s recombinant Factor VIII :C as compared to plasma- derived Factor VIII :C. The recombinant Factor VIII :C was unlikely to contain infectious agents such as the AIDS virus, and there was a possibility of an economic advantage to the recombinant Factor VIII :C. The court stated that the possibility of the occurrance of these advantages was sufficient to block the preliminary injunction and to give Genentech an opportunity to present its case for invalidity of the patent. ^^ preliminary injunction.") with Teledyne Indus., Inc. v. Windmere Prods., Inc. 433 F. Supp. 710, 40 (S.D. Fla. 1977) (permitting infringement during the course of the litigation would be to force patentee to accept a licensee for that period). 62. Smith Int'l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1581 (Fed. Cir. 1983) ("The very nature of the patent right is the right to exclude others. Once the patentee's patents have been held to be vahd and infringed, he should be entitled to the full enjoyment and protection of his patent rights."). 63. H. H. Robertson, 820 F.2d at 388 (prior adjudication of a patent's validity against a defendant not a party to the current action merely provides evidence, to which substantial weight may be given, of the vahdity of the patent claims litigated during the prior adjudication). 64. Hybritech, Inc. v. Abbot Labs., 849 F.2d 1446, 1448 (Fed. Cir. 1988) ("[T]he focus of the district court's pubUc interest analysis should be whether there exists some critical public interest that would be injured by the grant of preliminary relief."). 65. D. CfflsuM, supra note 48, at 20-296. 66. 666 F. Supp. 1379 (N.D. Cal. 1987). 67. Id. See also Eh Lilly and Co. v. Premo Pharm. Labs., Inc., 630 F.2d 120 (3d Cir. 1980). This case presented a more typical treatment of the public policy question in patent infringement preliminary injunction decisions: In enacting patent laws. Congress recognized that it is necessary to grant tem- porary monopolies on inventions in order to induce those skilled in the "useful arts" to expend the time and money necessary to research and develop new products and to induce them "to bring forth new knowledge," . . . sacrificing short-term price competition in order to foster creativity and improvement of products in [the] long run. 180 INDIANA LAW REVIEW [Vol. 23:169 III. The Court of Appeals for the Federal Circuit A. The Need for the CAFC Patent law inconsistencies that evolved between the circuits prior to the creation of the CAFC undermined the constitutional objective of the patent law '*to promote the progress of science . . . ."^^ Businesses found it to be risky to develop technologies that were not uniformly protected. They found it difficult to plan the use of technologies in the face of protections and restrictions which were uncertain and that varied from jurisdiction to jurisdiction.^^ According to Chief Judge Howard T. Markey while he was Chief Judge of the Court of Customs and Patent Appeals: A major problem addressed and solved in H.R. 2405 [the House version of the Federal Courts Improvement Act (FCIA), the act that spawned the CAFC^^l is the non-uniformity in interpretation and application of the patent laws of our Nation, and the unseemly and costly forum shopping facilitated thereby. . . . Indeed, the report accompanying H.R. 3806 in the 96th Congress described the problem: "Patent litigation long has been identified as a problem area, characterized by undue forum shopping and unsettHng inconsistency in adjudications." The need for a law of patents on which our people may rely is even greater when our nation is faced with a need to rein- dustrialize, to improve a productivity growth rate now ap- proaching zero, to reverse a faUing status in international trade, and to encourage the investment in innovative products and new "Viewed in these terms, the patent grant . . . functions as a means of raising the expected return to be gained from basic drug research sufficiently to overcome the investor firm's risk aversion and induce it to invest additional funds in research instead of alternative investment opportunities such as production process improvement programs, advertising, increased customer service, or the like." Id. at 137 (quoting Note, Standards of Obviousness and the Patentability of Chemical Compounds, 87 Harv. L. Rev. 607, 620 n.54 (1974). 68. U.S. Const, art I, § 8, cl. 8. 69. Sward & Page, The Federal Courts Improvement Act: A Practitioner's Per- spective, 33 Am. U. L. Rev. 385, 387 (1984). According to Sward and Page: "More detrimental than the battles over the forum, however, was that the different interpretations of the patent law discouraged innovation and made business planning difficult and in- vestment uncertain." Id. at 387. 70. The Federal Courts Improvement Act of 1982 (FCIA), enacted Pub. L. No. 97-164, § 125, 96 Stat. 36 (codified at 28 U.S.C. §§ 1292 (c)(l)(1982), 1295 (1982)). 1990] PATENT INFRINGEMENT 181 technology so necessary to achieve those goals. The chairman may be aware that 10 years ago the United States was No. 1 in international trade with 24 percent. Two years ago, the last year for which I have seen figures, we were No. 6 with 14 percent. And that trend must be reversed. It has always rested on innovation, advances in technology. We need to reverse that falling status in international trade. ^^ Compared to Judge Markey's vision of a stronger industrialized America energized by a strong patent system. Congress sought only two modest improvements from the creation of the CAFC: (1) An improve- ment in patent law uniformity as a result of one court hearing appeals from patent cases, ^^ and (2) a reduction of the workload in the other circuit courts of appeals. "Although patent cases are a small percentage of the cases that the regional courts of appeal handle, they are particularly complex, difficult, and time-consuming."^^ Congress designed the CAFC to meet these goals. B. The Court The CAFC is an intermediate appellate court of restricted subject matter jurisdiction. Congress assigned to it the exclusive jurisdiction of appeals from the federal district courts throughout the United States in patent cases. ^"^ "The Federal Circuit ... is a compromise between spe- ciaHzation, which can produce uniformity, and generahzation, which can prevent stagnation. . . ."''^ To balance these interests. Congress created a commission chaired by Senator Roman Hruska to examine the federal appellate system. ^^ The inconsistency of the patent law among the circuits was one aspect of the inquiry. ^"^ The commission advocated against creating a specialized court. ^^ It feared that judges on a specialized court would acquire "'tunnel 71. Court of Appeals for the Federal Circuit, 1981: Hearings on H.R. 2405 Before the Subcomm. on Courts, Civil Liberties, and the Administration of Justice of the House Comm. on the Judiciary, 97th Cong., 1st Sess. 6 (1981) (statement of Howard T. Markey, Chief Judge of the Court of Customs and Patent Appeals). 72. Sward & Page, supra note 69, at 388. 73. Id. 74. Adams, supra note 15, at 44. 75. Sward & Page, supra note 69, at 387. 76. Commission on Revision of the Federal Court Appellate System, Structure and Internal Procedures: Recommendations for Change, reported in 67 F.R.D. 195, 234 (1975) (Senator Roman L. Hruska, Chairman) [hereinafter Hruska Report]. 11. Id. 78. Id. 182 INDIANA LAW REVIEW [Vol. 23:169 vision,' seeing the cases in a narrow perspective without the insights stemming from broad exposure to legal problems in a variety of fields. "^^ The commission also argued that a speciahzed court would promote an increase in judicial activism in the area of specialization,®^ that if only one court was to pass on an issue its written opinions would contain only legal conclusions with little analysis,®' that the dilution of regional influences would be detrimental,®^ that the loss of breadth of experience suffered both by judges on the speciahzed court and by judges that would no longer be hearing cases within the area of speciahzation would be felt,®^ and that a specialized court would not attract objective, quality judges.®"^ During the CAFC's brief history it has gained the reputation of being biased toward plaintiffs with a tendency to adopt pro-patent positions.®^ During the court's first three years of operation sixty-nine section 103 cases were appealed to the CAFC. The district courts found 30% of these patents to be valid, ®^ while 54% of these were found to be valid by the CAFC on appeal.®^ Additionally, district courts found infringement in 60