Federal Circuit Affirms Denial of Preliminary Injunction Seeking to Prevent Patent Owner From Contacting Defendant’s Customers

April 10, 2008

In patent cases (and other intellectual property cases), plaintiffs often want to contact a defendant’s customers to put the customers on notice that the products or services they may purchase may be infringing. Defendants, on the other hand, want to prevent any such communications with their customers. Communications by a plaintiff to defendant’s customers can provide a plaintiff with a tactical advantage in litigation, but may also expose the plaintiff to claims of unfair competition or tortious interference.

On April 8, 2008, the Federal Circuit addressed the issue in Judkins v. HT Window Fashion Corp., Case No. 2007-1434. Judkins sued HT for patent infringement, and HT counterclaimed for unfair competition, alleging that Judkins violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), by sending HT’s customers and potential customers letters stating that an HT product infringed his patents. HT moved for a preliminary injunction, arguing that Judkins’ letters were in bad faith because he knew his patent was unenforceable. The district court denied the motion, and HT filed an interlocutory appeal.

The Federal Circuit affirmed the denial of HT’s motion for preliminary injunction. Focusing on HT’s ability to show likelihood of success on the merits (the first prong of the preliminary injunction standard), the Federal Circuit stated that a patentee has the right to inform potential infringers of potentially infringing activity unless the communication is made in bad faith. The Federal Circuit noted that the determination of bad faith has both objective and subjective elements, but held that the objective element was a “threshold requirement” and that if the objective baselessness requirement is not met, no injunction should issue.

Given that issued patents are presumed valid, and that a defendant challenging the validity or enforceability of a patent must do so by clear and convincing evidence, patent defendants are unlikely to be able to preliminarily enjoin plaintiffs from notifying a defendant’s customers about the potential infringement.