Threat of ITC Exclusion Order Not Enough to Obtain Preliminary Injunction

Likelihood of irreparable harm requirement not satisfied by speculative harm

Philips owns standards essential patents (SEPs) for telecommunications standards found in European Telecommunications Standards Institute (ETSI) specifications and agreed to license the patents on fair, reasonable, and nondiscriminatory (FRAND) terms. Thales implements products according to the ETSI specifications and sought a FRAND license from Philips. But Thales and Philips could not agree on how much money Thales should pay to Philips for the FRAND license, so Philips sued Thales for patent infringement in Delaware District Court (Delaware) and before the United States International Trade Commission (ITC).

The ITC does not award monetary damages for patent infringement. Its primary remedy is an exclusion order barring importation of infringing products. Arguing a FRAND commitment should preclude Philips from obtaining an exclusion order, Thales asked the Delaware district court to preliminarily enjoin Philips from continuing the ITC proceeding.

The district court declined to issue a preliminarily injunction, and the Federal Circuit did not find that decision to be clearly erroneous. The Federal Circuit pointed out that a party seeking a preliminary injunction must establish that it is likely to suffer irreparable harm without an injunction, and that the mere possibility or speculation of harm is insufficient.

Thales’ affidavits stated only that the threat of an ITC exclusion order caused several customers to “voice concerns” and express doubt regarding Thales’ ability to deliver products, and Thales characterized its alleged harm as living under the “cloud on the business” of a potential exclusion order and the potential loss of business that may occur if it loses at the ITC. Such evidence of speculative harms was found to be insufficient to show a likelihood of irreparable harm. Also, the Federal Circuit noted that Thales did not present any evidence that it lost customers, had customers delay purchases, or struggled to acquire new business because of the ongoing ITC proceeding.