Synqor Inc v. Artesyn Technologies Inc

SYNQOR, INC, Plaintiff,

v. ARTESYN TECHNOLOGIES, INC., ASTEC AMERICA, INC., BEL FUSE, INC., CHEROKEE INTERNATIONAL COPR., DELTA ELECTRONICS, INC., LINEAGE POWER CORP., MURATA ELECTRONICS NORTH AMERICA, INC., MURATA MANUFACTURING CO., LTD., MURATA POWER SOLUTIONS INC., and POWER-ONE, INC. Defendants.

CASE NO. 2:07-CV-497-TJW-CE

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

MARSHALL DIVISION

Dated: January 24, 2011.

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff SynQor, Inc. ("SynQor") motion for a permanent injunction. [Dkt. No. 913.] Defendants Artesyn Technologies, Inc., Astec America Inc., Bel Fuse, Inc., Cherokee International Corp., Delta Electronics, Inc., Delta Products Corp., Lineage Power Corporation, Murata Electronics North America, Inc., Murata Manufacturing Co., Ltd., Murata Power Solutions, Inc., and Power-One, Inc., (collectively "Defendants") oppose the motion for permanent injunction. The Court held a full evidentiary hearing on the issue of a permanent injunction that started on January 19, 2011 and ended on January 20, 2011. In their response, Defendants ask the Court to stay any immediate injunction pending appeal. [Dkt. No. 919.] SynQor opposes the requested stay. The Court has carefully considered the parties' submissions, the record, and the applicable law. For the following reasons, SynQor's motion for a permanent injunction is GRANTED and Defendants request for stay pending appeal is DENIED.

I. BACKGROUND

The parties to this case selected a jury on November 30, 2010. The trial commenced on December 13, 2010 and the jury reached a verdict on December 21, 2010. The jury found that defendant, Artesyn Technologies, Inc. directly infringed claim 1 of U.S. Patent No. 7, 558, 083 ("the '083 patent") and induced or contributed to infringement of claims 2, 8, 10 and 19 of U.S. Patent No. 7, 072, 190 ("the '190 patent), claims 21 and 30 of U.S. Patent No. 7, 272, 021 ("the '021 patent"), claim 1 of the '083 patent, claims 56 and 71 of U.S. Patent No. 7, 564, 702 ("the '702 patent"), and claim 9 of U.S. Patent No. 7, 269, 034 ("the '034 patent"); that defendant, Astec America, Inc., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 of the '702 patent; that defendant, Bel Fuse, Inc., directly infringed claims 2, 8, and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 of the '702 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 of the '702 patent and the Court having previously determined Bel Fuse directly infringed claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 of the '702 patent; that defendant, Cherokee International Corp., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 ofthe '702 patent; that defendant, Lineage Power Corp., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, claims 56 and 71 of the '702 patent, and claim 9 of the '034 patent; that defendant, Delta Electronics, Inc., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, claims 56 and 71 of the '702 patent, and claim 9 of the '034 patent; that defendant, Murata Power Solutions, Inc., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 of the '702 patent; that defendants, Murata Electronics North America, Inc., and Murata Manufacturing Co., Ltd., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, and claims 56 and 71 of the '702 patent; that defendant, Power-One, Inc., directly infringed claim 1 of the '083 patent and induced or contributed to infringement of claims 2, 8, 10 and 19 of the '190 patent, claims 21 and 30 of the '021 patent, claim 1 of the '083 patent, claims 56 and 71 of the '702 patent, and claim 9 of the '034 patent. The jury failed to find invalidity of any of the patents-in-suit.

On December 29, 2010, the Court entered a partial judgment on the verdict ordering Defendants to pay the monetary damages awarded by the jury, which collectively totaled Ninety-Five Million, Two Hundred Twenty-Four Thousand, Eight Hundred Sixty-Three Dollars ($95,224, 863). [Dkt. No. 907.] Defendants have moved for judgment as a matter of law on the issues of invalidity, non-infringement, and no damages. Plaintiff has moved for judgment as amatter of law on infringement and validity of the patents-in-suit. These motions have not been fully briefed and remain pending before the Court. The parties, however, do not dispute that SynQor is entitled to a permanent injunction. Thus, the issues presented before the Court relate to the scope of the injunction, the terms of the injunction, and whether Defendants are entitled to a stay of the injunction pending appeal.

II. LEGAL STANDARD

The Patent Act provides that courts "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." 35 U.S.C. § 283. A permanent injunction is appropriate when a four-part test is satisfied:

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). "The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion." Id.

Whether an injunction should be stayed pending an appeal involves four considerations:

1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits;

2) whether the applicant will be irreparably injured absent a stay;

3) whether issuance of the stay will substantially injure the other parties interested in the proceeding;4) where the public interest lies.

Standard Haven Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 512 (Fed. Cir. 1990). A court does not give equal weight to each factor, but instead uses a flexible balancing approach. Id. at 512-13.

III. DISCUSSION

A. Permanent Injunction

Bearing these factors in mind, the Court now turns to the facts of this case to assess the propriety of permanent injunctive relief. SynQor contends that all four of the eBay factors point in favor of granting an injunction. Defendants do not dispute that a permanent injunction is warranted, but instead dispute the scope and terms of the injunction. In support of their proposed injunction, Defendants do not present any arguments relating to the first three eBay factors, but instead present arguments relating only to the public interest factor.

1. Irreparable Injury

SynQor has demonstrated irreparable injury. SynQor directly competes with Defendants in the market for unregulated and semi-regulated bus converters, and this fact weighs heavily in the Court's analysis. The best case for obtaining a permanent injunction often occurs when the plaintiff and defendant are competing in the same market. In that context, the harm in allowing the defendant to continue infringing is the greatest. This Court has recognized the high value of intellectual property when it is asserted against a direct competitor in the plaintiffs market. "Past harm to a patentee's market share, revenues, and brand recognition is relevant for determining whether the patentee 'has suffered an irreparable injury.'" i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010) (citations omitted). There has been a loss ofmarket share, lost profits, and potential revenue to Defendants in the past by Defendants' acts of infringement, and the Court finds that there will likely be such loss in the future. The evidence supports SynQor's contention that it was essentially driven out of the bus converter market due to the prevalence of low priced bus converters offered by Defendants.

There is also a concern of loss of brand name recognition and goodwill. "These are the type of injuries that are often incalculable and irreparable." z4 Technologies, Inc. v. Microsoft

Corp., 434 F. Supp. 2d 437, 440-41 (E.D. Tex. 2006) (finding no irreparable harm when the plaintiff "will not suffer lost profits, the loss of brand name recognition or the loss of market share because of [defendant's] continued sale of the infringing products"). One example of the loss of goodwill is demonstrated by Defendants' customer Cisco System, Inc., ("Cisco") recent attempt to qualify unregulated bus converters made by non-party competitors of SynQor, even though SynQor has three bus converters that have been fully...